■■C^X. 


\A  f  a  n  Wtthdrawn 

RPB 


■  —  or 


INSURANCE 


IN 


CONNECTICUT 


BY 

P.  HENRY  WOODWARD 


1897 
D.     H.     HURU    &    CO 

BOSTON 


Copyright  1897 
By  D.   H.   HURD   &  CO. 


CONTENTS 


CHAPTER    I. 

Page 

Early  Fire  and  Marine  Insurance i-io 

Poverty  of  the  country  after  the  Revokition — Mutual  antipathies  of  the  Colonies — Situa- 
tion in  Connecticut — Re-awakened  energy — Policy  written  by  Sanford  and  Wadsworth 
in  1794 — The  Hartford  and  New  Haven  Insurance  Company  in  1795-^Ezekiel  Williams 
Jr..  and  local  marine  insurance — Its  methods — Hartford  conspicuous  in  insurance — The 
pioneers:  Jeremiah  Wadsworth,  Peleg  Sanford,  Daniel  Wadsworth.  John  Caldwell,  John 
Morgan,  Ezekiel  Williams,  Jr. ,  John  Chenevard,  Michael  and  Thomas  Bull,  Hudson  & 
Goodwin — The  Hartford  Insurance  Company  formed  in  1S03 — Merger  in  the  Protection 
in  1S25 — Thomas  Scott  Williams— The  stock  note  method — The  New  Haven  Company 
— Companies  in  Norwich,  Middletown,  New  London  and  New  Haven — The  Napoleonii: 
wars — The  West  India  trade — Commercial  distress  after  1807 — Our  navy — Passage  of 
early  marine  insurance. 

CHAPTER    n. 
The  Mutual  Assurance  Company  of  the  City  of  Norwich.     .     .     .     lo  ii 

The  first  incorporated  insurance  company  of  Connecticut— Incorporated  May,  1795 — The 
New  London  agency — Annual  meetings  held  in  the  court  house — A  prosperous  business 
— Secretaries  from  1794  to  1S76 — Insurance  e.xclusively  on  dwelling-houses  since  1S3S. 

The  Mutual  A.ssurance  Company  of  New  Haven     ....         .     .  ii 

The  Norwich  Fire  Insurance  Company .     .  1 1 

Joseph  Williams,  Jr.,  first  secretary  and  executive  officer— Abandonnitnl  of  marine  Inisi- 
ness  in  1S18 — Admitted  into  State  of  New-  York  in  1849 — Presidents  from  1S07  to  1S68. 

The  Hartford  Fire  Insurance  Company 12-21 

Scarcity  of  securities — Its  first  investment — Rates  empirical— Character — Cause  of  slow 
growth — Planting  agencies — Corporate  donations — Early  salaries — Good  and  bad  luck — 
No  reserves  laid  by — General  Nathaniel  Terry  and  Walter  Mitchell  — Change  of  manage- 
ment and  heavy  losses  in  1835 — How  a  crisis  was  met — A  series  of  fires  — Eliphalet 
Terry — Increase  of  capital — Profits  capitalized— Hezekiah  Huntington — T.  C.  Allyn — 
George  I^.  Chase — A  more  vigorous  policy  Losses  by  the  Chicago  fire  .settled  in  full — 
One  million  dollars  in  fresh  subscriptions — Mr.  Chase  and  the  Ocean  Bank  receivership 
— Successive  offices     Builds  in  1870  and  enlarges  in  i8g6—Oflficers— Present  condition. 

The  New  Haven  Fire  Insurance  Company 21-22 

Incorporated  in  1813 — Charter  revoked  in  1822. 

The  Middletown  Fire  Insurance  Company 22 

Incorporated  May,  1S13— After  a  short  e.xistence  its  outslaniling  risks  were  assumed  by 
the  /Etna  of  Hartford. 

iii 


2024538 


iv  CONTENTS 

CHAPTER    III. 
The  ^Etna  Insurance  Company  of  Hartford 


Page 


Curious  origin — Organization  — First  officers — Henry  L.  Ellsworth — Reinsures  risks  of 
Middletown  Fire  Insurance  Company — Early  discussions  and  practices — Agency  busi- 
ness pushed — Mobile,  Alabama,  in  1827— Distress  following  the  English  panic  of  1825  — 
Heroic  action  of  directors — Isaac  Perkins — The  panic  of  1837 — An  early  journey — The 
early  director — Three  generations:  Joseph,  Junius  S.,  and  J.  Pierpont  Morgan — Inland 
insurance  -President  Brace  and  the  New  York  fire  of  1845 — Turn  of  the  tide — Passage 
of  the  half  century—Failure  of  the  Protection — The  .Etna  occupies  the  vacated  field  — 
Increases  of  capital  Sketch  of  Thomas  K.  Brace — Edwin  G.  Ripley — Thomas  A.  Alex- 
ander— Internal  dissensions  over  reinsurance  reserves — Beginning  of  classifications -Art 
— Outline  charts — A  book  of  instructions— The  Chicago  and  Boston  fires — Lucius  I. 
Hendee — fotham  Goodnow — Erastus  J.  Bassett — Andrew  C.  Bayne — Present  officers 
and  condition — William  B.  Clark. 

The  Protection  Insurance  Company  of  Hartford 32-35 

Initial  advantages — Lineage — Organization — William  W.Ellsworth — Thomas  C.  Perkins 
— Its  widespread  agency  system — Ephraim  Robins  and  his  work— Head  of  the  western 
department — Its  Cincinnati  office  a  Whig  club  room — List  of  successive  officers — Mark 
Howard,  first  special  agent — His  courage — Apparent  profits  dissipated  in  dividends — 
W.  B.  Robins — Desperate  expedients— Collapse  -Residuary  legatees. 


CHAPTER    IV. 

The  Security  Insurance  Company  of  New  Haven 35-36 

The  City  Fire  of  Hartford 36 

The  Bridgeport  Fire  and  Marine  Insurance  Company 36-37 

Bogus  swapping  of  .securities — Driven  from  New  \'ork  and  Massachusetts  -  Pailure. 

The  City  Fire  Insurance  Company  of  New  Haven T,y 

Double  retirement. 

The  Connecticut  Fire  Insurance  Co.mpany  of  Hartford 37-40 

Conservative  policy — Capitalization  of  profits — Benjamin  W.  Greene— Settlement  of 
Chicago  losses  in  1871 — Saving  the  plant — Increase  of  capital  -  John  11.  l-^ldriilge — M. 
Bennett,  Jr. — J.  D.  Browne— Present  condition  and  officers. 

The  Ph<f:nix  Fire  Insurance  Company  of  Hartford 40-44 

Henry  Kellogg,  the  founder— Organization — N.  H.  Morgan — Occupation  of  frontier  and 
Pacific  coast — Rapid  growth  — Increase  of  capital— Simeon  L.  Loomis — Governor  Jewell 
amid  the  ruins  of  the  Chicago  fire — First  payment  of  loss — Effect  on  the  despairing  mul- 
titude -  l'"resh  capital — Successive  locations — Asa  W.  Jillson — Henry  Kellogg-D.  W.  C. 
Skilton— Statistics— Officers. 

The  State  Firk  Insurance  Company  of  New  Haven 45-48 

charter  dormant  — Nebulous  assets — More  vapor — Enter  Benjamin  No\es — Unseen 
favors— Flight  of  the  secretary — Elizur  Wright  hoodwinked — A  new  light— Certificates 
for  show — Plausible  phrases— The  lion  roused — Efforts  to  prosecute^Voluntary  assign- 
ment-Suits on  stock  notes — An  unparalleled  shrinkage. 


CONTENTS.  V 

CHAPTER   V. 

Page 

Thk  Merchants'  axd  the  National  of  Hartford 49-52 

Formation  of  the  Merchants'  — Lessons  from  tlu-  Protection — Monotonous  prosperity — 
Entire  assets  in  1871  distributed  to  ('hicas;o  policy-holders  — Revived  in  the  Merchants'  — 
Large  over-subscription — W'liole  capital  paid  in  cash — Boston  fire  of  1872 — Mark  Howard 
—  lames  Nichols— Condition— Ofticers. 

Charter  Oak  Fire  and  Marine  Insurance  Company  of  Hartford.  52 

The  Home  Insurance  Company  of  New  Haven 53 

Heavy  losses  and  large  dividends  Fluctuations  of  capital — Failure  and  local  distress  - 
Benjamin  Noyes  in  a  spasm  of  virtue. 

The  North  .\merican  Fire  Insurance  Co.aipanv  of  Hartford.     .     .  53-54 

The  New  England  Fire  and   Marine  Insurance  Co.  of  Hartford.  54 

The  Norwai.k  Marine  and  Fire  In.surance  Company 54 

The  Thames  Fire  Insurance  Company  of  Norwich 54 

The  Union  Fire  Insurance  Company  of  Hartford 54 

The  Putna.m  P'ire  Insurance  Co.mpany  of  Hartford 54 

The  Quinnipiac  Insurance  Company  of  New  Haven 55 

The  Orient  Insurance  Company  of  Hartford 55 

Succeeds  the  City  Fire  Insurance  Company— Organized  in  November,  1871— Losses  in 
Boston  in  1S72— Rapid  recovery— Charles  B.  Whiting— EfTects  of  the  panic  of  1893 — 
Condition — Officers. 

The  Meriden  Insurance  Company 56 

The  .\tlas  Insurance  Company 57 

Foreign  Companies  M.anaged  in  America  by  Martin  Bennett,  Jr.  57 

CHAPTER    VI. 
Mutual  Insuranxe  Co.mpanies 5^ 

Age  and  assets — Needs  which  brought  into  being  the  oldest  of  the  Mutuals. 

The  Windham  County  Mutual  Fire  Insurance  Company     ....  58 

F'ormation,  Progress  and  Economies — The  rural  director — Officers. 

The  Hartford  County  Mutual  Fire  Insurance  Company 59 

The  premium  note— A  small  beginning  -  A  crisis  met — Officers. 

The  Middlesex  Mutual  Assurance  of  Middletown 60 

Largest  of  Connecticut  mutuals — Evolution  of  methods — Officers. 

The  New  London  County  Mutual  Fire  Insurance  Co.mpany  ...  60 

Officers  from  1S40  to  1895. 

The  State  Mutual  Fire  Insurance  Company  of  Hartford    ...  61 


vi  CONTENTS. 


CHAPTER   VII. 

Page 

Hartford  and  Life  Insurance • 6i 

The  pioneers — Curious  opposition — Elder  Suan  denounces  the  pernicious  novelty. 

The  Connecticut  Mutual  Life  Insi'rance  Company  of  Hartford   .  62 

Origin- Restrictions  of  the  charter- Organization — Guaranty  fund  -  Severe  economy 
Dissensions — Battle — The  premium  note — Controversy  with  Superintendent  Barnes  of 
New  York— Defiant  attitude  of  the  company — No  forage  for  raiders — Distribution  of 
savings — Voluntary  renunciation  of  forfeitures — Rapid  growth,  1863-67  -  Outpour  of  paper 
money  and  land  speculations — Refusal  of  the  company  to  loan  to  speculators — Heedless 
legislation — Defeat  of  a  desperate  assault  Gu^?  R.  Phelps — ^James  Goodwin — Succession 
of  officers— Jacob  L.  Greene— John  M.  Taylor — The  company  first  to  foresee  the  fall  in 
rates  of  interest — Its  prudent  action — .Acrid  criticism — Patrons  protected —Hostility  to 
the  Tontine  and  other  speculative  schemes — Condition — Officers. 

CHAPTER   VIII. 
The  American  National  Life  and  Tru.st  Company  of  New  Haven    69-81 

Professor  Benjamin  Silliman,  president — Benjamin  Noyes,  secretary— Reckless  assump- 
tions as  to  rates  of  interest  and  mortality — Perplexity  of  commissioners  over  statements 
— Exclusion  from  New  York  and  Massachusetts  Criticisms  of  Elizur  Wright  Noyes  in 
full  control  Also  first  insurance  commissioner  of  Connecticut — Building  on  leased  land 
— Ideal  figure-heads— A  troublesome  trustee— An  honest  agent — Sophistication  of  debts 
—An  attack  from  Norwich — Under  a  new  name— Looseness  of  new  charter — Bogus  sub- 
scriptions—Guaranty capital — Metempsychosis— A  bad  bargain— Trouble  at  Albany — 
John  W.  Stedman,  commissioner — Frequency  of  complaints — A  thorough  investigation — 
Deficiency  in  assets — Trustee  applied  for — The  commissioner  beaten  Mythical  securi- 
ties— Unconscious  .shareholders — Something  from  nothing — Value  of  the  building  -  Cour- 
age and  persistence  of  Commissioner  Stedman— P'ight  transferred  to  the  legislature — 
Sudden  conversions — The  curtain  lifted — Another  trial — A  phantom  credit  of  |5o,ooo — 
Nemesis — DeparturefromConnecticut— Purchase  of  a  Washington  charter — Dark  seances 
— More  phantom  bonds — Clothing  a  corpse— A  fresh  start — ^Jersey  justice- Noyes  in 
prison — Talcott  H.  Russell  appointed  receiver — Efforts  to  collect  the  wreckage — 
Triumphal  return — forlorn  exit. 

CHAPTER    IX. 
The'  Connecticut  Health  Insurance  Company 81 

An  impracticable  scheme— Changes  of  plan — .Slaves  and  coolies — Officers^ames  Di.xon. 

The  Charter  Oak  Life  Insurance  Company  of  Hartford  ....     82-89 

Brilliant  start — Gideon  Welles — Selling  stock  notes — Their  character  Successive  officers 
Stock  notes  paid  in  earnings — Beguiling  Votes — Good  work  in  the  field — High  tide- 
Weak  management— Note  of  warning — Bad  breaks— Allen,  Stejihens  &  Co. — Mining 
ventures — The  Valley  Road — A  summer  hotel  -A  hole  in  West  Virginia — A  costly  office 
building— Entrance  of  Henry  J.  Furber-rSecures  control— His  contract  -  Loopholes — 
Expert  investigations — Deplorable  discoveries  —Exchange  of  bad  debts  for  valuable  real 
estate — Premature  sales — Prevalent  distrust -A  special  commission  — Differing  views  of 
the  Commissioner  and  of  the  commission — Mortgage  of  the  building — Change  of  man- 
agement—Marshall  lewell  in  control— Too  late — The  company  changes  from  stock  to 
mutual— Trial  for  conspiracy — Secret  contracts  of  Wiggin  and  White — George  M.  Bar- 
tholomew, president — Final  collapse. 


CONTENTS.  vii 

CHAPTER    X. 

Pack 
Thk  ^l^TNA  Lii-1-:  Insurance  Company  of  Hartford .    90-94 

A  rliild  of  tlic  ^^tna  Fire  Iiisiir.inif  Company — Se'iiaralion  of  control — (Jrgani/ation^ 
(ieiiL-ral  financial  depression — War  stimuhis-  Large  increase  of  business — Rapid  jjjrowth 
rrofitable  investments — Early  loans  on  Illinois  Central  lantls — Oilier  profitable  loans — 
Deatlirate  small— Increases  of  capital  — Eliplialet  A.  Bulkeley — Thomas  O  Enders — 
Morgan  G.  Bulkeley — Other  officers— The  accident  di-parlnu-nt  o|)en(il  lamiary  i,  1891. 

The  Phcenix  Mutcal  Life  Insurance  Company  of  Hartford  .     .     .    94-99 

Temperance  and  life  insurance  — Reformers — Public  indilTerence — Aliandonmeiit  of  the 
temperance  feature — Early  officers— Panic  of  1S73 — Excessive  dividends  to  policy-hold- 
ers Change  of  management  in  1S75 — Painful  discoveries — Payment  of  stock  notes — 
The  work  of  repair — Appearance  of  an  adventurer  Suggested  perils— Action  of  the 
legislature — Extinguishment  of  stock — The  company  becomes  mutual  -  Its  new  building 
— Condition — Officers. 

CHAPTER    XI. 

The  Continental  Life  Insurance  Company  of  Hartford    ....  99-101 

Organization— Plots  and  counterplots — Capture — Spectral  payments  of  stock  notes  A 
bewildered  commissioner — Bogus  bank  credits— Phantom  bonds — Report  of  special  com- 
mission— Filling  a  hole — A  rude  awakening  Further  probing— Plxplosion- Appoint- 
ment of  receivers. 

The  Connecticut  General  Life  Insurance  Company 101-ioj 

Formed  to  insure  impaired  lives  Inherent  difiBcuIties — Abandonment  of  the  scheme- 
Capital  paid  in  cash— Organization — Corner  turned  in  1876 — Tontine  insurance — Com- 
plimentary banquet— Thomas  W.  Russell — Condition  of  the  company — Officers. 

The  Hartford   Life   and   Annuity   Insurance  Company  (Now   The 

Hartford  Life  Insurance  Co.) 103-106 

Original  scheme — Organization — Early  losses  Change  of  policy—  Prosperity — Another 
change — Recuperation — Plan  of  Henry  P.  Iluclos — Officers — New  building. 

CHAPTER    XII. 

Miscellaneous  Insurance  of  Health,  of  Live  Stock 106 

The  Travelers  Insurance  Company  of  Hartford 106-112 

Conception — Organization— Early  difficulties  and  economies  The  field  unexplored — 
Facts  and  generalizations — Costliness  of  new  truths — (Iratuitous  advertising  through  ac- 
cidents -  Wild  competition — Absorption — Fatality  among  weaklings — No  rival  left — A 
secession  in  1874 — Jokes  before  the  funeral — Establishment  of  life  department  in  1S65 — 
Its  success — Increases  of  capital  — Purchase  of  an  historic  mansion — Its  enlargement — 
Character  of  loss-claims — Notable  accidents — James  G.  Batterson — Rodney  Dennis — 
Officers — Condition. 

The  Hartford  Steam  Boiler  Inspection  and  Insurance  Company.  112-117 

Incoming  of  steam — Early  boiler  explosions — Recklessness  of  engineers — The  Polytech- 
nic Club — Foreign  inspections — Evolution  of  a  new  idea— Charter — Organization — Lack 
of  faith — Desertion  of  directors — ].  M.  Allen  called — Acceptance  Public  skepticism — 
Creation  of  a  new  demand — Economies — Thoroughness  of  inspections — Absence  of 
losses — Changes  of  capital — Stock  of  1500,000  fully  paid — The  Locomotive — Preventive 
work — Indemnity  Plans  for  steam  plants — The  laboratory — Impartial  attitude  toward 
the  trade — Statistics — Occasional  casualties— J.  M.  Allen     Other  officers. 

Insurance  in  Connecticut  Localized 117-118 

Underwriting  in  Connecticut  mostly  confined  to  Hartford — Evolution  of  a  century — 
Leadership,  how  gained— Cosmopolitanism— State  commissioners. 

Postscript,  July  ist,  1897 iiS 

.^tna  Insurance  Company — Hartford  Life  Insurance  Company. 


INSURANCE  IN  CONNECTICUT. 


BY   P.    HENRY   WOODWARD. 


CHAPTER   I. 

FIRE    INSURANCE.* 

[(XDERWRITING  in  Connecticut  began  in  the  last  decade  of  the  eighteenth 
century.  Its  early  ventures  were  humble,  for  the  country  was  poor  and 
few  could  afford  to  take  risks.  ]\Iost  of  the  large  fortunes  of  the  colonial 
period  were  scattered  and  lost  during  the  Revolution.  At  the  close  of  the 
struggle  the  stock  of  specie  on  hand  went  abroad  to  buy  goods  for  which 
importers  could  find  little  else  to  offer  in  payment.  Six  years  of  unrest  and  anxiety 
followed,  during  which  the  work  of  repair  progressed  slowly.  It  was  not  till  the 
adoption  of  the  Federal  Constitution  in  1789,  and  the  establishment  of  a  mild  but 
stable  central  government  that  our  people  threw  off  the  weight  of  repression. 

When  Washington  became  the  first  president  there  was  slight  travel,  or  traffic,  or 
social  intercourse  between  residents  of  different  states.  Habits  of  isolation  arose,  not 
alone  from  difl5culties  of  transportation,  but  from  deep-seated  though  wholly  irrational 
antipathies.  The  free  commingling  of  troops  from  all  the  colonies  during  the  war 
did  little  to  arouse  a  spirit  of  nationality.  Sons  of  Massachusetts  and  Connecticut, 
of  Virginia  and  Carolina,  were  intensely  loyal  to  their  respective  mothers,  but  hardly 
cared  for  brothers  across  the  border,  except  as  united  in  a  common  league  to  break 
the  hated  yoke  of  King  George. 

In  Connecticut  the  industrial  situation  at  the  commencement  of  our  story  was 
simple.  Manufactures,  except  for  coarse  articles  of  prime  necessity,  awaited  birth 
among  the  unsuspected  marvels  of  the  future.  A  large  majority  drew  support  from 
agriculture.  Commerce  with  the  West  Indies  and  with  neighboring  groups  of  islands 
carried  off  the  surplus,  giving  not  only  employment,  but  practical  education  to  many 
youth,  born  of  the  best  blood  of  the  commonwealth,  who  learned  even,-  part  of  the 
business  from  selling  and  buying  cargoes  to  navigating  ships,  running  blockades  and 
eluding  hostile  cruisers.  Hartford,  New  Haven,  Middletown,  New  London  and 
Norwich  gathered  the  surplus  products  of  surrounding  districts,  and  distributed  the 
goods  purchased  in  exchange. 

After  1789  the  reawakened  energies  of  our  people  found  outlets  in  ever-multiply- 
ing activities.  In  1 792  the  Hartford  Bank  and  the  Union  Bank  of  New  London  were 
organized.     The  benefits  were  so  quickly  apparent  that  other  towns  hastened  to  pro- 

*  A  few  citations  without  change  of  verbiage  have  been  incorporated  in  the  following  history 
from  reports  made  from  time  to  time  by  the  writer. 

1 


2  INSURANCE   IN    CONNECTICUT. 

vide  like  facilities.  At  Hartford  insurance  followed  quickly  iu  the  wake  of  the  new 
bank,  initiated  and  largely  carried  on  for  half  a  generation  by  the  same  men. 

Early  in  1794  Sanford  and  Wadsworth  opened  an  office  for  the  purpose  of  insur- 
ing houses,  furniture,  merchandise,  etc.,  against  fire.  Policy  No.  2,  issued  February 
8,  1794,  insures  the  house  of  William  Imlay  for  one  year  at  the  rate  of  one-half  per 
cent. 

As  the  evolution  of  a  policy  satisfactory  to  both  parties  making  the  contract,  has 
been  long  and  tedious,  and  is  still  incomplete,  the  first  attempts  in  that  line  have  a 
peculiar  interest.     It  runs  thus,  pen-written  words  being  reproduced  iu  italics. 

"No.  2. 

Whereas  William  Imlay,  Esq.,  0/ Hartford,  or  whom  else  it  may  concern,  whollj-  or  partly, 
Friend  or  Foe,  doth  make  Assurance  on  His  House  against  Fire,  and  all  dangers  of  Fire  ;  moreover 
against  all  Damage  wliich  on  Account  of  Fire  may  happen,  either  by  Tempest,  Fire,  Wind,  own 
Fire,  Negligence  and  Fault  of  own  Servants,  or  of  Neighbors,  whether  those  nearest  or  furthest 
off;  all  external  Accidents  and  Misfortunes  ;  thought  of  or  not  thought  of,  in  what  manner  soever 
the  damage  by  Fire  might  happen  ;  for  tlie  space  of  one  year  commencing  o?t  tlie  eiglitii  day  of 
February,  l~<)4,  and  ending  on  tlie  eiglith  day  of  February,  lygs,  both  at  twelve  o'clock  at 
Noon,  valuing  specially  and  voluntarily  the  said  House  at  tlie  Sum  Insured. — And  the 
Assured,  or  whom  it  may  concern,  in  case  of  Damage,  or  Hurt,  shall  need  to  give  no  Proof 
nor  account  of  the  Value ;  but  the  producing  this  Policy  shall  suffice.  And  in  case  it 
should  happen  that  the  said  House,  the  Whole  or  Part,  are  burnt  and  suffer  Damage,  on 
that  Account,  we  do  hereby  promise  punctually  to  pay  and  ratify,  within  the  space  of  three 
IMonths  after  the  Fire  shall  have  happened,  due  Notice  having  been  given  to  us,  and  no  Deduction 
to  be  made  from  the  Sum  assured  except  Two  and  an  Half  per  Cent.,  provided  said  Loss  amounts 
to  Five  per  Cent.,  under  which  no  Loss  or  Damage  will  be  paid.  And  in  case  of  a  partial  Loss, 
all  that  shall  be  found  to  be  saved  and  preserved,  shall  be  deducted,  after  the  Deduction  of  the 
Charges  paid  for  the  saving  and  preser\nng  ;  and  concerning  which  the  Assured  shall  be  believed 
on  his  Oath,  without  our-alledging  any  thing  against  it.  And  so  we  the  Assurers  are  contented, 
and  bind  Ourselves  and  Goods  present  and  to  come,  renouncing  all  Cavils  and  Exceptions  con- 
trary to  these  Presents,  for  the  true  Performance  of  the  Premises,  the  Consideration  due  unto  us 
for  this  Assurance  by  the  Assured,  at  and  after  the  Rate  oi  one-half  per  cent. 

Reciprocally  submitting  all  Differences  to  two  Persons,  One  to  be  chosen  by  the  Assured  out 
of  Three  to  be  named  by  the  Assurer,  the  other  by  the  Assurer  or  Assurers,  out  of  Three  to  be 
named  b)'  the  Assured,  who  shall  have  full  Power  to  adjust  the  same  ;  but  in  case  they  cannot 
agree,  then  such  two  Persons  shall  choose  a  Third,  and  any  two  of  them  agreeing,  shall  be  obli- 
gator}'  to  both  Parties. 

In  Witness  Whereof  We  the  Assurers  have  subscribed  our  Names  and  Sums  assured  in 
Hartford  the  Sth  Day  oi  February.  One  Thousand  Seven  Hundred  and  Ninetyfour. 

£Boo  Sanford  &Wads7vorth  \  Eight  hundred  Pounds, 

for  the  Hartford  Fire  I?isura?ice  Company.  J       •* 

At  no  point  can  charges  of  evasion  or  ambiguity  be  brought  against  the  docu- 
ment. In  preparing  the  printed  form,  it  was  well  tmderstood  that  none  btit  persons 
of  good  repute  could  buy  indemnity.  Sanford  &  Wadsworth  either  signed  for  them- 
selves alone,  or  for  a  small  coterie  for  whom  they  acted  as  agents.  There  was  then 
no  such  chartered  institution  as  the  "Hartford  Fire  Insurance  Company." 

Jeremiah  Wadsworth,  John  Caldwell,  Sanford  &  Wadsworth,  Elias  Shipman  and 
John  Morgan,  July  27,  1795,  formed  a  copartnership  "for  the  purpose  of  underwrit- 
ing on  vessels,  stock,  merchandise,  etc. ,  by  the  firm  of  the  Hartford  and  New  Haven 
Insurance  Company."  Obviously  this  is  the  partnership  of  the  year  before  enlarged 
by  the  addition  of  Elias  Shipman,  of  New  Haven,  who  was  made  agent  at  that  city. 
Between  the  others  there  had  been,  and  continued  to  be,  very  close  relations.  They 
were  together  in  many  enterprises,  both  public  and  private.  When  the  new  mem- 
ber was  taken  in,  the  name  was  also  expanded  that  it  might  cover  with  its  compre- 
hensiveness the  entire  field  of  operations.    John  Caldwell  was  appointed  agent  for 


INSURANCE   IN    CONNECTICUT.  3 

Hartford.  Elias  Sliipman  soon  withdrew,  establishing  a  sejiarate  bnsiness  in  New 
Haven.  From  the  fall  of  1797  this  was  carried  on  under  the  charter  of  the  New 
Haven  Insurance  Company  till  it  retired  in  1833. 

Local  marine  insurance  soon  became  a  separate  branch  of  the  business,  crystal- 
lizing around  Ezekiel  Williams,  Jr.  It  was  carried  on  not  by  a  definite  association, 
but  by  distinct  combinations,  variable  in  personnel  and  in  amounts  written.  Mr. 
Williams  formed  the  groups,  collected  the  premiums,  kept  the  records,  investigated 
claims  and  paid  losses. 

Owing  to  the  excellence  of  its  harbor  most  of  the  vessels  covered  by  the  policies 
thus  issued  sailed  to  and  from  New  London.  A  smaller  number  hailed  from  Say- 
brook,  Middletown,  and  the  Connecticut  River.  With  few  exceptions  they  were 
bound  to  the  West  Indies  and  to  the  smaller  groups  in  the  same  seas.  There  was 
some  coastwise  trade  with  Charleston,  S.  C.  Rarely  a  ship  cleared  for  an  European 
port. 

For  the  round  trip  the  gross  premiums  often  ran  up  to  ten,  twelve,  fifteen  and 
sixteen  per  cent.,  and  in  some  cases  even  higher,  according  to  the  character  of  the 
voyage.  Material  rebates  were  frequently  allowed  if  the  vessel  either  touched  only 
or  avoided  certain  ports,  and  returned  safely.  For  the  premium  the  assured  usually 
gave  their  notes,  payable  out  of  the  profits  or  at  the  close  of  the  venture. 

The  assurers  agreed  to  bear  "perils  of  seas,  men  of  war,  fires,  enemies,  pirates,  rovers,  thieves, 
jettisons,  letters  of  mart,  and  counter-mart,  surprizals,  takings  at  sea,  arrests,  restraints,  and 
detainments  of  all  kings,  princes,  or  people  of  what  nation,  condition  or  quality  soever  ;  baraty 
of  the  master  (unless  the  assured  be  the  owner  of  the  vessel)  and  mariners,  and  all  other  losses, 
perils  and  misfortunes,  that  have  or  shall  come  to  the  hurt,  detriment  or  damage  of  the  said 
vessel  or  any  part  thereof,  for  which  assurers  are  legally  accountable." 

Aside  from  the  terminals  named  in  the  policy  vessels  were  allowed,  without 
prejudice,  to  sail  to,  touch  and  stay  at  any  ports  or  places,  if  obliged  by  stress  of 
weather,  or  unavoidable  accident.  In  case  of  loss  the  assured  abated  two  and  one- 
half  per  cent.,  and  payment  was  to  be  made  within  ninety  days  after  proof,  provided 
the  loss  amounted  toi^ve  per  cent.,  under  which  limit  no  liability  was  incuiTed  unless 
in  case  of  general  average.  Disputes  were  settled  by  arbitration,  the  decision  being 
final. 

The  amounts  written  by  the  several  assurers  on  a  single  vessel  were  \'er3-  varia- 
ble. Sometimes  a  dozen  parties  would  join,  taking  from  fifty  to  one  hundred  and 
fifty  dollars  each.  Others  freely  wrote  two,  three,  and  as  high  as  five  and  six  hun- 
dred dollars.  John  Caldwell  was,  perhaps,  the  boldest  operator.  Quite  a  number 
ventured  in  once  or  twice  and  then  retired  permanently  from  the  arena.  A  single 
hit  cured  them  of  the  gambling  propensity,  if  so  harsh  a  word  may  be  used  in  con- 
nection with  a  strictly  legitimate  business.  When  autumnal  tempests  were  raging  or 
wintr}'  winds  howling,  the  timid  found  a  risk  on  a  marine  policy  a  dreadful  hindrance 
to  sleep. 

The  names  that  appear  most  frequently  are  John  Caldwell,  Michael  and  Thomas 
Bull,  Asa  and  Dan  Hopkins,  Richard  Alsop,  Normand  Knox,  John  Chenevard,  E. 
Williams,  Jr.,  Thomas  Sauford,  John  Morgan,  Hudson  &  Goodwin,  William  Howe, 
Samuel  Lawrence,  Gleasou  &  Cowles,  Hooker  &  Chaffee,  Spencer  Whiting,  Daniel 
Jones,  John  Knox,  Samuel  Alcott,  somewhat  in  the  above  order. 

Wherever  any  line  of  effort  attains  paramount  success,  especially  if  it  involves 
unusual  difl[iculties  and  dangers,  the  inquirer  will  find  that  at  the  outset,  or  at  some 
crisis  in  its  development,  or  most  often  continuously,  its  destinies  have  been  carried 
by  men  of  stiong  character  and  marked  ability.     Experiments  in  underwriting  have 


4  INSURANCE   IN  CONNECTICUT. 

been  freely  made  in  nearly  all  the  cities  of  the  state.  With  the  exception  of  a  few 
mutual  fire  companies,  outside  of  a  single  town,  almost  ever}'  venture  has  ended  in 
disaster.  In  many  instances  the  tradition  of  their  existence  has  faded  out,  even  in 
the  communities  where  they  once  flourished.  If  questioned  on  the  point  the  local 
antiquary  looks  blank  and  asks  for  time.  Of  them  it  can  generally  be  said  that  they 
were  managed  with  ordinary  ability,  and  were  destroyed  by  extraordinary  calamities. 

Hartford  stands  forth  a  conspicuous  exception.  Though  in  size  but  a  speck  on 
the  map  of  the  world,  she  has  few  rivals  in  underwriting,  while  the  oldest,  richest  and 
biggest  cities  on  the  planet  would  be  rash  to  claim  superiority.  To  comprehend  the 
situation  as  presented  to-day  we  must  review  the  history  of  the  men  who  laid  the 
foundations,  and  of  their  successors  who  have  reared  the  superstructure. 

The  first  avowed  partnership  formed  for  the  purpose  begins  with  the  name  of 
Jeremiah  Wadsworth,  an  intimate  associate  of  Robert  Morris  and  Alexander  Hamil- 
ton, and  one  of  the  best  equipped  financiers  of  the  time.  He  was  born  in  Hartford 
July  12,  1743,  son  of  Rev.  Daniel  Wadsworth,  pastor  of  the  First  Church.  At  the 
age  of  thirty  he  settled  in  his  native  town  as  a  merchant,  having  made  several 
voyages  as  master.  By  successive  promotions  he  became,  in  the  spring  of  1778, 
commissary-general  of  purchases  for  the  colonies.  Later  he  accepted  a  similar  posi- 
tion in  the  French  army  in  America,  and  held  it  till  our  allies  returned  home. 
Under  his  roof  Washington,  Lafayette,  Rochambeau,  Ternay,  and  many  other 
dignitaries  were  entertained. 

Colonel  Wadsworth  was  one  of  the  founders  of  the  Bank  of  North  America  in 
Philadelphia,  in  1781-2,  taking  one  hundred  and  four  shares  of  $400  each.  In  1785, 
on  the  urgent  advice  of  Alexander  Hamilton,  he  was  elected  president  of  the  Bank 
of  New  York.  He  was  a  director  in  the  first  United  States  Bank,  and  was  chiefly 
instrumental  in  organizing  the  Hartford  Bank,  of  which  he  was  elected  president,  but 
declined. 

Besides  filling  minor  positions  Colonel  Wadsworth  served  in  the  Continental 
Congress,  in  the  convention  called  to  ratify  the  Constitution,  and  three  terms  in  the 
Federal  Congress.  Public-spirited  and  large-hearted,  he  was  foremost  in  the  enter- 
prises which  he  believed  would  advance  the  prosperity  of  his  neighbors  and  of  the 
country.  He  died  April  30,  1 804.  In  our  histories  his  eminent  talents  and  services 
have  received  scant  recognition. 

Peleg  Sanford,  confidential  clerk  of  Col.  Wadsworth,  formed  a  partnership  with 
his  only  son  Daniel,  under  the  title  of  Sanford  &  Wadsworth.  B}-  mutual  consent 
the  firm  was  dissolved  January  10,  1798.  Mr.  Sanford  moved  to  New  Haven,  and 
died  in  April,  1801,  on  the  passage  from  Charleston  to  New  York. 

Rich  by  inheritance  and  benevolent  by  nature,  Daniel  Wadsworth  was  chiefly 
noted  among  contemporaries  for  the  grandeur  of  his  belongings,  and  is  chiefly 
remembered  for  the  munificence  of  his  public  gifts.  He  furnished  the  site  and  a 
generous  cash  subsciption  for  the  Athenaeum,  where  the  literary,  artistic  and  his- 
torical treasures  of  the  city  are  largely  collected.  To  this  institution  he  bequeathed 
thirty  paintings,  several  by  eminent  artists.  His  influence  on  the  movements  of 
business  was  more  indirect  than  active.     He  died  in  1848. 

Major  John  Caldwell,  a  merchant  extensively  engaged  in  foreign  and  domestic 
trade,  held  a  leading  place  in  nearly  all  the  local  enterprises  of  his  time.  He  built 
and  owned  ships,  providing  no  small  share  of  the  cargoes  to  and  from  the  West 
Indies,  and  the  ports  of  other  foreign  lands.  He  was  president  of  the  Hartford 
Marine  Insurance  Company  throughout  its  entire  existence  ;  first  major  of  the 
Governor's  Horse  Guards,  incorporated  in  1788  ;  and  was  elected  twenty  times  to  the 


INSURANCE   IN  CONNECTICUT.  5 

legislature,  which  then  met  semi-annualh'.  John  Trumbull,  the  poet,  John  Caldwell 
and  John  Morgan  constituted  the  commission  for  building  the  State  House,  begun 
in  1794.  Major  Caldwell  was  also  a  member  of  the  commission  that  supervised  the 
building  of  the  bridge  across  the  Connecticut  in  1809.  He  was  one  of  the  founders 
of  the  Asylum  for  the  Deaf  and  Dumb,  the  pioneer  school  in  the  United  States  for 
the  education  of  this  class  of  imfortunate  children.  Young  men  came  from  the  West 
Indies  to  acquire  a  mercantile  education  in  his  house.  Several,  after  returning  home 
became  distinguished  merchants.  The  firm  of  John  Caldwell  &  Co.  prospered  for  a 
long  period,  but  later  sustained  ruinous  losses  in  the  Napoleonic  wars  and  in  the  War 
of  18 1 2.  He  lived  twenty  years  after  retirement  from  active  work,  passing  away 
May  20,  1838,  in  his  eighty-third  year,  having  been  born  December  31,  1755.  Six 
feet  tall  and  of  stalwart  frame,  he  is  still  remembered  as  a  genial  and  courtly  gentle- 
man of  the  colonial  type.  Col.  Samuel  Colt,  inventor  of  the  revolver,  was  the  son 
of  his  daughter  Sarah. 

John  IMorgan,  of  the  fifth  generation  from  James,  the  emigrant  ancestor,  having 
graduated  at  Yale  College  in  1772,  selected  Hartford  for  a  home,  and  became  a  lead- 
ing merchant  of  the  Connecticut  \'alley.  By  the  largest  subscription  and  by  tireless 
efforts  he  pushed  the  construction  of  the  bridge  across  the  Connecticut,  holding  the 
presidency  of  the  company  from  1809  till  1820.  The  street  thence  to  Main  took  his 
name.  His  operations  w'ere  so  extended  that  he  made  large  importations  in  the  first 
American  craft  to  enter  Chinese  waters.  He  was  devoted  to  Christ  Church,  and  was 
largely  instrumental  in  raising  it  from  weakness  to  strength.  Possessing  a  rich, 
well-trained  voice,  he  not  unfrequently  read  the  service  on  Sundays.  Outside,  in 
excited  talk,  he  now  and  then  tore  words  from  their  decorous  settings  in  the  prayer- 
book  to  drop  them  quite  unconsciously  into  bad  company.  Pel  low- worshipers 
knew  that  no  harm  was  meant  and  gently  overlooked  these  aberrations  of  language. 
To  the  last  ]\Iaj.  Caldwell  and  John  Morgan  clung  to  the  colonial  style  of  dress, 
short  breeches,  long  stockings,  silver  knee-buckles  and  ruffled  shirt  bosoms,  which 
well  became  their  high  bearing  and  courtly  manners.  The  large  fortune  of  Mr. 
Morgan  was  lost  in  the  business  distress  that  long  bore  heavily  on  New  England, 
during  and  after  the  War  of  1 812.  He  died  in  New  York  city,  September  19,  1S42, 
aged  eighty-nine. 

These  men  undoubtedly  made  up  the  partnership  of  1794,  known  as  the  "Hart- 
ford Fire  Insurance  Company."  When  Elias  Shipman  was  admitted  in  July,  1795, 
out  of  compliment  to  him  and  to  express  more  accurately  its  enlarged  scope  of  oper- 
ations, the  name  was  changed  to  the  Hartford  and  New  Haven  Insurance  Company, 
the  word  Fire  being  designedly  omitted  as  excluding  marine  risks. 

With  the  dissolution  of  the  partnership  of  Sanford  &  Wadsworth  in  1798,  the 
Hartford  and  New  Haven  Insurance  Company  passed  awa}'.  Caldwell  and  Morgan 
brought  the  weight  of  their  wealth  and  influence  to  the  aid  of  Ezekiel  Williams,  Jr., 
who  as  already  described  became  the  central  figure  for  the  next  few  years  in  the 
marine  insurance  of  the  Connecticut  valley. 

Ezekiel  Williams,  Jr.,  was  born  at  Wethersfield,  Conn.,  December  29,  1765. 
In  both  the  male  and  female  lines  the  descendants  of  Robert  Williams,  of  Roxbury, 
Mass.,  the  emigrant  ancestor  of  Ezekiel,  have  in  large  numbers  by  character  and 
talents  won  high  position  both  in  the  professions  and  in  business.  His  father,  for 
twenty-two  years  sheriff  of  Hartford  county,  resigned  in  1789.  Silas  Deane, 
chagrined  that  a  townsman  could  surpass  him  in  loyalty  to  the  cause  of  independence, 
spoke  sneeringly  of  his  ardor  as  "boiling  zeal."  The  zeal  sprang  from  both  tem- 
perament and  training,  for  his  father  Rev.  Solomon  Williams  for  over  half  a  century 


6  INSURANCE   IN  CONNECTICUT. 

was  pastor  of  the  church  iu  Lebanon,  of  which  Gov.  Jonathan  TrnmbuU  was  a 
pillar.  From  the  view-point  of  the  king  that  chnrch  was  one  of  the  hottest  nests  of 
treason  in  America.  William  Williams,  signer  of  the  Declaration  of  Independence, 
was  a  brother  of  Ezekiel,  Sr.  "  Rector"  Elisha  Williams,  brother  of  Rev.  Solomon, 
served  as  colonel  in  the  field,  as  chaplain  of  a  regiment,  as  judge  of  the  superior 
coirrt  and  as  president  of  Yale  College.  Such  fruit  ripened  on  a  single  twig  of  the 
family  tree.  Ezekiel,  Jr.,  graduated  at  Yale  in  1785.  He  was  postmaster  at  Hart- 
ford from  1795  till  1803.  He  married  Abigail,  daughter  of  Oliver  Ellsworth,  chief 
justice  of  the  United  States  Supreme  Court,  and  died  October  18,  1843. 

John  Chenevard,  son  of  John  Michael  Chenevard,  of  Geneva,  was  born  in  Hart- 
ford in  1733,  about  ten  years  after  the  arrival  of  his  father  in  this  country.  Having 
been  a  member  of  the  council  from  the  charter  of  the  city  in  1788,  till  March,  1799, 
he  was  then  elected  alderman  in  place  of  John  Caldwell,  who  had  also  served  in  one 
or  other  of  the  boards  continuously  during  the  same  period.  A  thrifty  merchant,  he 
left,  in  1805,  an  estate  of  over  thirty  tliousand  dollars. 

Alichael  and  Thomas  Bull  were  the  youngest  sons  of  Caleb  and  Martha  (Cald- 
well) Bull,  who  had  twelve  children  that  lived  to  marry.  Six  of  the  sons  were  orig- 
inal stockholders  in  the  Hartford  Bank.  At  this  time,  from  numbers  and  standing, 
the  family  had  wide  influence. 

Hudson  &  Goodwin  published  the  Connecticut  Courant,  established  in  1764,  the 
oldest  newspaper  iu  the  country.  From  the  day  the  first  number  was  issued,  till  the 
close  of  the  War  of  18 12,  the  people  of  the  state  moved  forward  with  singular 
unanimity,  and  the  Courant  voiced  their  convictions  on  matters  of  morals,  religion 
and  politics.  Despite  the  increase  in  the  number  of  competitors  for  popular  favor, 
and  the  rivalry  of  an  ever-growing  body  of  literature,  it  still  retains  a  large  share  of 
its  ancient  power.  Mr.  Goodwin's  active  connection  with  the  paper  lasted  for  seventy 
years.  He  died  May  13,  1844,  "the  oldest  man  in  the  town,"  having  been  born  in 
1757.     Mr.  Hudson  withdrew  in  1815. 

In  Hartford  the  pioneers  in  underwriting  gave  the  profession  a  character,  which 
has  clung  to  it  through  all  vicissitudes  of  fortune.  The  early  method  of  conducting 
the  business  involved  a  great  deal  of  needless  labor.  Many  policies  bore  from  ten  to 
fourteen  signatures.  In  the  first  place  these  must  all  be  procured.  In  case  of  a 
prosperous  voyage,  the  distribution  of  the  premiums  called  for  an  interview  with 
each  subscriber.  Less  cheerful  was  the  presence  of  the  broker  when  he  went  around 
to  collect  for  losses.  Some  were  not  in,  some  not  ready  to  settle,  and  frequent  were 
the  invitations  to  "come  again."  A  single  contract  might  impose  on  him  twenty 
or  more  separate  interviews,  and  each  contract  required  a  repetition  of  the  same 
routine.  A  large  part  of  the  details  could  be  avoided  by  a  "pooling  of  issues." 
Accordingly,  in  October,  1803,  a  charter  was  procured  for  "The  Hartford  Insurance 
Company."  *  The  capital  was  $80,000,  with  the  privilege  of  increase  to  $150,000, 
divided  into  shares  of  $40  each.  Twenty-five  per  cent,  was  paid  in  notes  in  two 
equal  installments,  and  the  remaining  seventy-five  per  cent,  in  notes  secured  by  mort- 
gages on  real  estate,  or  by  approved  indorsements.  John  Caldwell,  Jonathan  Brace 
and  Ephraim  Root  were  authorized  to  call  the  first  meeting  of  stockholders,  and  to 
appoint  one  of  their  number  to  preside  thereat.  The  company  was  organized  and 
ready  for  business  within  two  months  from  the  passage  of  the  act  of  incorporation. 
John  Caldwell  was  elected  president,  and  Normand  Knox,  secretary.  It  opened  an 
office  on  the  south  side  of  Pearl  street,  near  Main,  one  door  west  of  the  Hartford 

■*  Incorporated  as  "The  Hartford  Insurance  Companj',"  but  called  in  early  policies  "The 
Hartford  Marine  Insurance  Company."     Its  business  was  wholly  marine. 


INSURANCE   IN   CONNECTICUT.  7 

Bank.  IMr.  Knox  was  also  cashier  of  the  bank  from  June,  1799,  till  July,  1814,  when 
he  resigned  to  take  the  presidency  of  the  Phoenix  Bank.  The  contract  of  the  com- 
pany follows  mainly  the  forms  in  use,  but  explicitly  excludes  from  responsibility 
individual  shareholders : 

"And  the  assured  in  this  polic}'  expressly  agrees,  and  the  Hartford  Marine  Insurance  Com- 
pany by  their  president  undertake,  that  the  joint  stock  and  property  of  the  said  company,  shall 
alone  be  responsible  for  any  loss  that  may  accrue  upon  this  policy  ;  and  the  assured,  by  accept- 
ing the  signature  of  the  president,  gives  credit  thereby  only  to  the  said  stock,  and  disavows 
having  recourse  to  the  person  or  separate  propertj-  of  anj'  member  of  the  companv.  And  all 
suits  to  be  brought,  if  any  there  shall  be,  shall  be  brought  against  the  president  who  subscribes 
this  policy,  or  his  successor  in  office  for  the  time  being  ;  and  all  recoveries  had  thereon,  shall  be 
conclusive  upon  the  company,  so  far  as  to  render  the  company's  property  liable  thereby  and  no 
farther." 

Mr.  Williams  continued  for  a  short  time  to  solicit  business  on  the  old  plan,  but, 
about  the  middle  of  June,  1S04,  gave  up  the  unequal  contest.  Later,  he  succeeded 
Mr.  Knox  as  secretary. 

For  ten  j-ears  from  1807,  Thomas  Scott  Williams,  younger  brother  of  Ezekiel, 
Jr.,  held  the  place.  He  was  born  at  Wethersfield,  Conn.,  June  26,  1777,  graduated 
at  Yale  College  in  1794,  studied  law,  and,  rounding  out  his  education  by  a  course  in 
practical  insurance,  further  dignified  the  family  record  by  various  services  in  the 
General  Assembly,  by  representing  the  district  in  the  Fifteenth  Congress,  by  four 
years  in  the  mayoralty  of  Hartford,  and  by  eighteen  on  the  bench, — thirteen  as  Chief 
Justice  of  Connecticut.  All  benevolent  enterprises  found  in  him  an  ardent  friend. 
He  died  December  15,  1861. 

The  secretaryship  must  have  possessed  great  attractions,  for  in  18 17  Mr.  Wil- 
liams was  succeeded  by  his  brother-in-law,  William  W.  Ellsworth,  afterwards  mem- 
ber of  Congress  and  governor.  In  May,  1825,  the  stockholders  were  incorporated  as 
the  Protection  Insurance  Company.  John  Caldwell  remained  president  till  the 
company  was  merged  in  its  successor. 

Besides  the  companies  located  at  Hartford  and  New  Haven,  the  Norwich  Marine 
and  the  Middletown  Insurance  Companies  were  chartered  in  1803,  and  the  Union  of 
New  London  in  1805.  The  business  of  the  five,  by  the  several  acts  of  incorporation, 
was  confined  wholly  to  marine  insurance. 

A  practice,  enjoined  at  first  by  the  poverty  of  the  country-,  prevailed  for  a  long 
time  from  the  ease  with  which  it  allowed  new  ventures  to  be  launched  on  a  small 
investment  of  funds  in  hand.  Nearly  all  early  charters  required  a  variable,  but  never 
a  large  percentage  of  the  subscriptions  to  stock  to  be  paid  either  at  once  or  within  a 
few  weeks,  leaving  the  balance  to  be  represented  by  notes  secured  to  the  satisfaction 
of  the  directors.  These  obligations  might  or  might  not  bear  interest ;  but  if  they  did 
it  was  expected  that  the  payments,  as  they  fell  due,  would  be  canceled  by  dividends. 
Still,  both  subscribers  and  the  public  looked  upon  the  stock-notes  as  binding  obliga- 
tions, to  be  met  to  the  last  cent  in  case  of  necessity.  Later  in  the  development  of 
the  country,  swindlers,  ever  on  the  alert  not  only  to  contrive  new  schemes  of  fraud, 
but  to  pervert  existing  customs  to  purposes  of  cheating,  hit  upon  the  device  of  start- 
ing bogus  concerns  on  froth  instead  of  cash.  Of  course  these  went  to  pieces  in  the 
first  serious  storm.  Policy-holders,  misled  by  lying  statements,  lost  heavily.  Educa- 
ted by  experience,  the  people  became  more  careful,  while,  in  state  after  state,  this 
kind  of  cheats  has  been  suppressed  by  law. 

The  capital  of  the  New  Haven  Company,  the  first  of  the  group,  was  fixed  at 
not  less  than  fifty  thousand  dollars,  divided  into  shares  of  twenty-five  dollars.     Five 


8  INSURANCE   IN  CONNECTICUT. 

dollars  on  each  share  were  called  for  within  thirty  days  from  the  time  of  subscription, 
five  more  by  note  of  hand  payable  within  sixty  days,  and  the  remaining  fifteen  were 
paid  by  stock-notes.  While  the  shareholders  were  relieved  from  personal  liability 
oustide  of  the  special  investment,  they  were  also  required  to  insert  in  every  policy  a 
clause  expressive  of  the  fact. 

Elias  Shipman,  who  had  acquired  an  appetite  for  insurance  by  his  connection 
with  the  first  group  of  underwriters  in  Hartford,  procured  the  charter,  and  in  Janu- 
ary, 1798,  was  elected  president.  Austin  Denison  was  appointed  secretar}-.  At  the 
annual  meeting  a  year  later,  the  board  declared  a  dividend  of  $3  a  share  out  of  the 
profits  of  the  previous  six  months,  or  30  per  cent,  on  the  cash  actually  paid  in.  The 
following  July  the  dividend  was  increased  to  ^5  a  share,  or  50  per  cent,  on  the  money 
invested.  These  were  paid  through  the  New  Haven  Bank,  of  which  William  Lyon, 
treasurer  of  the  insurance  company,  was  cashier.  Mr.  Shipman  held  the  presidency 
about  twenty-six  years,  and  was  succeeded  by  Gilbert  Totten.  In  1833  Timothy 
Dwight  was  elected  president.  Secretaries  were  Austin  Denison,  179S-1812  ;  John 
Shipman,  1812-1833  ;  Elihu  Sanford,  1833. 

For  reasons  to  be  given  presently,  its  early  good  fortune  did  not  long  continue. 
After  a  jDatient  struggle  with  adversity,  in  1831  the  stockholders  voted  to  suspend 
business  for  two  years,  or,  until  a  special  committee  raised  to  consider  the  situation, 
with  Timothy  Dwight  as  chairman,  should  judge  it  expedient  to  call  a  meeting  in 
order  to  resume.  But  the  outlook  did  not  improve.  In  January,  1833,  the  stockholders 
voted  to  cease  the  issue  of  further  policies.  No  dividend  had  been  paid  for  six 
years,  and  the  committee  reported  that  the  prospect  of  making  good  past  losses  by 
future  income  was  far  from  flattering.  The  afiairs  of  the  company  were  quickly 
settled,  the  sum  of  $7.25  on  each  share  having  been  distributed  the  following  July  as 
a  final  dividend.  After  retirement  from  active  operations,  the  organization  was  kept 
up  nominally,  with  Timothy  Dwight  as  an  impressive  figurehead,  for  the  purpose  of 
pressing  claims  against  the  government  on  account  of  French  spoliations. 

The  capital  of  the  Norwich  was  the  same  as  that  of  the  New  Haven  Company, 
the  shares  being  ^50  each. 

Middletown  secured  more  liberal  terms.  The  capital  of  her  company  was 
§60,000,  divided  into  shares  of  §50  each,  on  which  $2. 50  were  paid  at  the  time  of  sub- 
scribing, the  same  amount  within  thirty  days  after  commencing  business,  and  the 
other  §45  in  notes. 

Benjamin  Williams,  who  had  written  marine  risks  on  his  own  account,  was  first 
president,  holding  the  place  till  18 10,  when  he  was  succeeded  by  Ebenezer  Sage.  In 
1 8 19  Joseph  Alsop  became  president,  and  soon  after  the  company  wound  up  its 
affairs.  Secretaries  were  Asher  Miller,  Enoch  Parsons,  Chauncey  Whittlesey  and 
Samuel  B.  Redfield. 

The  capital  of  the  Union  Insurance  Company  at  New  London  was  fixed  at  not 
less  than  $100,000,  with  the  privilege  of  increase  to  $150,000.  Byway  of  variety  it 
was  divided  into  shares  of  §200  each.  Ten  per  cent,  was  called  for  in  two  install- 
ments of  five  percent,  each,  and  the  other  ninety  per  cent,  in  notes  secured  by  mort- 
gage on  real  estate  or  by  personal  indorsements. 

Presidents  were  :  Jared  Starr,  1805-1818;  Elihu  Denison,  1818-1829  ;  Codding- 
ton  Billings,  1829-1831  ;  Richard  Law  and  Coleby  Chew.  Secretaries  were:  Job 
Taber,  David  Colt,  Thomas  S.  Perkins,  Coleby  Chew  and  Joshua  C  Learned. 

The  Ocean,  of  New  Haven,  incorporated  in  October,  1818,  began  business  on  a 
capital  of  S6o,ooo  the  following  June,  in  its  office  on  Union  wharf.  Roger  Sherman 
was  president  and  Truman  Woodward  secretar}-.     Justus  Harrison  became  secretary 


INSURANCE   IN   CONNECTICUT.  9 

in  1832.  Conditions  were  loo  unfavorable  to  permit  tlie  concern  ever  to  gain  a  sure 
foothold.      After  a  long  infancy  it  passed  away  by  a  lingering  death. 

The  marine  companies  that  entered  the  field,  near  the  beginning  of  the  century, 
for  a  short  time  enjoyed  great  prosperity.  With  no  experience  to  aid  the  managers  in 
framing  a  system,  they  divided  current  earnings  to  the  last  penn\',  witliout  a  thought 
of  building  up  reserves  to  carry  them  safely  through  seasons  of  possible  disaster. 

During  the  Napoleonic  wars  our  carrj-ing  trade,  stimulated  for  short  inter\-als  by 
abnormal  profits,  was  vexed  and  robbed  by  Great  Britain  and  France  in  turn,  who 
both  looked  with  equal  contempt  upon  our  rights  and  our  power.  As  if  this  were 
not  enough,  our  own  government  adopted  a  policy  of  retaliation,  still  more  destruc- 
tive to  our  commerce  than  the  lawless  acts  of  the  belligerents. 

New  Haven,  New  London,  Hartford  and  other  towns  of  the  lower  Connecticut 
valley,  had  an  extensive  and,  when  let  alone,  a  lucrative  trade  with  the  West  Indies 
and  other  islands  in  the  same  seas.  Exports  embraced  horses,  cattle,  hay,  lumber, 
hoops,  staves,  flour,  corn,  corn-meal,  potatoes,  oats,  beans,  onions,  tobacco,  cheese, 
lard,  beef,  pork,  butter,  crackers,  etc.  Imports  consisted  mostl)-  of  sugar,  salt,  rum, 
and  molasses.  Horses  which  were  rapidly  used  up  on  the  sugar  plantations,  and  for 
which  there  was  a  steady  demand,  and  cattle,  were  driven  across  the  country  to  the 
ports  on  the  sound.  A  great  deal  of  stuff  from  Massachusetts,  Vermont  and  New 
Hampshire  was  floated  down  the  river  to  Hartford,  and  either  shipped  direct,  or  car- 
ried around  to  New  London  in  small  craft,  and  there  transferred  to  ocean  freighters. 

In  Connecticut  many  young  men  of  the  highest  promise,  after  leaving  school, 
acquired  on  shipboard  experience  of  great  value  to  themselves  and  to  the  country'. 
Bright  boys  were  thrust  into  positions  of  responsibilit)-,  and  often  acquitted  them- 
selves admirably.  Beset  with  perils  from  the  utter  disregard  of  England  and  France 
for  neutral  rights,  they  became  skillful  in  eluding  dangers  which  they  were  too  weak 
to  meet  openly. 

To  masters  thus  trained  wide  latitude  was  given.  Live  stock  was  usually  con- 
signed to  some  dealer  on  the  islands  and  the  in-bound  cargo  to  the  captain.  After 
the  first  landing  he  was  authorized  to  sail  to  other  ports  at  his  discretion,  according 
to  the  state  of  the  market  and  the  political  outlook.  Owners  instructed  captains  to 
be  careful  not  to  get  into  difficulty-  by  going  into  a  blockaded  port,  or  by  taking  on 
board  contraband  goods,  and  yet,  ever  ready  to  run  risks  for  the  chance  of  great  gains, 
closed  the  letters  with  a  sa\-ing  clause,  leaving  the  business  of  the  voyage  to  be  con- 
ducted as  they  should  think  "most  for  the  interest  of  the  concerned."  Hostile 
cruisers  could  not  find  in  the  instructions  a  line  or  a  hint  to  excuse  seizure,  partly 
because  drawn  up  for  their  perusal.  Trained  amid  perils  and  forced  to  meet  ever 
changing  conditions,  masters  became  adroit  diplomats  as  well  as  skillful  sailors  and 
traders. 

The  embargo  of  1807  and  the  subsequent  non-intercourse  acts  oppressed  New 
England.  Exports  from  the  United  States  fell  from  $110,084,207  in  1807  to 
$22,430,960  in  1808.  On  imports  the  duties  paid  at  New  London  dropped  from 
$201,838  in  1807  to  $98,107  in  1808;  $58,417  in  1809,  and  $22,343  in  1810.  Our  ves- 
sels lay  idle  and  rotting.  In  New  England  the  commercial  distress  was  the  more 
unbearable  because  the  people  well  knew  that  the  restrictive  policy  of  the  govern- 
ment was  more  injurious  to  them  than  to  the  nations  at  which  it  was  aimed. 

Of  course  the  fortunes  of  our  marine  insurance  companies  withered  with  the 
failure  of  foreign  trade.  Even  w^ir  rates,  though  oppressive  to  the  shipper,  fell  below 
the  losses  of  insurers.  Claims  for  French  spoliation  and  other  unlawful  seizures 
gradually  took  the  place  of  solid  assets  in  the  hands  of  the  companies. 


10  INSURANCE   IN  CONNECTICUT. 

After  long  endurance,  when  at  length  the  Federal  government  was  driven  into 
war,  our  sailors,  trained  in  the  merchant  marine,  electrified  friends  and  astounded 
foes  by  the  splendor  of  their  naval  victories.  On  the  ocean  where  she  was  supposed 
to  rule  without  a  rival  England  was  humiliated  and  beaten.  Till  then  both  at  home 
and  abroad  the  flag  of  the  Republic  had  symbolized  little  but  immaturity.  Our  small 
navy  in  the  first  real  trial  of  its  mettle  both  cemented  the  wavering  sentiment  of 
nationality  and  gave  to  the  jJeople  faith  in  their  destiny. 

To  the  sorrow  of  marine  underwriters  the  peace  of  1 8 1 5  failed  to  bring  a  speedy 
revival  of  prosperity.  Foreign  trade  improved  haltingly.  Relapses  so  interrupted 
the  course  of  recovery  that  at  times  the  observer  could  hardly  tell  whether  the  move- 
ment was  forward  or  backward.  In  the  case  of  a  people  full  of  energy,  enterprise 
and  resources,  there  could  be  no  doubt  as  to  the  final  outcome.  The  strong  can  work 
and  wait,  certain  that  good  times  are  ahead.  But  many  cannot  wait.  The  passage 
across  the  depressions,  always  broad  and  deep  and  rough  beyond  expectation,  strews 
the  graveyards  of  commerce  with  the  bones  of  the  weak.  Crippled  by  seizures  and 
spoliation,  our  marine  companies  yielded  to  the  strain.  The  Norwich  was  saved  by 
changing  to  fire  insurance  in  1818.  Seven  j-ears  later  the  Hartford  came  forth  from 
the  shadows  of  the  dark  valley  reincarnate  in  the  Protection.  The  others  passed 
away  silently,  leaving  few  traces  from  which  their  troublous  stor}'  can  be  told.  Thus 
ended  the  first  dvnastv  of  marine  underwriters  in  Connecticut. 


CHAPTER    II. 

INSURANCE   IN   CONNECTICUT— Continued. 

'  HE  first  incorporated  insurance  company  in  the  state  still  exists,  and  in  an 
age  of  countless  changes  has  never  departed  from  the  simple  plan  of  its 
founders.  On  the  evening  of  December  29,  1794,  a  number  of  substantial 
citizens  of  Norwich  met  to  consider  plans  for  mutual  protection  against 
losses  by  fire.  The  old  way  of  passing  around  the  hat  for  the  aid  of  the 
neighbor  who  had  lost  his  house  or  barn,  did  not  work  fairly.  The  generous  gave 
too  much,  but  there  were  more  who  gave  too  little.  At  best  the  outcome  was  uncer- 
tain, and  this  gathering  looked  for  something  better. 

On  the  26th  of  January  they  met  again.  By-laws  and  a  deed  of  settlement  were 
approved.  Each  person  joining  the  association  agreed  to  pay  on  the  sum  insured 
for  him  a  premium  of  one-half  per  cent,  for  the  first  year,  one-third  for  the  second 
and  one-fourth  thereafter.  Profits  were  to  be  left  in  the  treasury  till  they  reached 
;f  2, 000  ($6,666.66),  after  which  the  surplus  was  to  be  divided  annually  on  equitable 
terms.  Each  person  insured  to  an  amount  not  exceeding  ;^ioo  was  entitled  to  one 
vote,  for  an  insurance  of  i^200  to  two  votes,  and  above  that  sum  to  one  vote  for  each 
iJ"200,  but  no  incorporation  could  have  more  than  one  vote  by  any  way  or  means 
whatever.  The  post-Revolutionary  generation  of  Americans  had  a  great  dread  of 
corporations,  and  as  law-makers,  in  granting  charters  where  abuses  were  likely  to 
arise,  insisted  upon  strict  limitations.  Similar  fears  cropped  out  in  dealing  with  them 
as  associates. 

In  case  a  single  loss  exhausted  the  money  or  property  in  the  treasury,  the  mem- 
bers were  bound  to  contribute  pro  rata,  not  exceeding  one  per  cent,  on  the  amounts 
insured  for  each,  to  make  up  the  deficiency. 


INSURANCE   IN   CONNECTICUT.  11 

111  May,  1795,  the  association  was  incorporated  by  the  name  of  the  Mutual  As- 
surance Company  of  the  City  of  Norwich,  on  the  basis  of  the  "deed  of  settlement." 
The  company  issued  policies  only  from  the  home  office  and  through  its  agency 
in  New  London.  At  the  annual  meeting  in  18 14  the  auditors  reported  that  not  only 
was  the  guaranty  capital  of  ^^2,000  fully  made  up,  but  after  appropriating  ^1,054-27 
to  pay  return  premiums,  a  balance  of  ^450.93  still  remained  in  the  treasury,  subject  to 
the  order  of  the  directors. 

Annual  meetings  were  held  in  the  court-house  at  Norwich  Town  till,  in  1825,  it 
was  voted  to  hold  them  alternately  in  the  two  societies,  beginning  at  Chelsea  the  fol- 
lowing year. 

In  general  the  business  has  been  prosperous.  The  insured  are  all  known  to  the 
managers  and  to  a  large  extent  to  each  other.  At  any  time  a  person  of  doubtful 
reputation  would  have  found  it  very  difficult  to  secure  one  of  its  contracts.  Yet,  al- 
though hedged  in  by  safeguards,  the  company  has  passed  through  seasons  of  adver- 
sity. In  1844  it  lost  $3,189  on  nine  policies,  meeting  the  drain  by  borrowing  $i,Soo 
from  the  Savings  Society.  Three  years  passed  before  the  impairment  of  $1,691  in 
the  capital  account  was  made  good.  Under  the  most  careful  management  the  busi- 
ness of  fire  insurance  has  from  the  outset  been  called  to  pass  through  seasons  of  calam- 
ity that  set  at  defiance  the  laws  of  average.  With  the  growth  of  population  and 
wealth  the  recurrence  of  fiery  seasons  becomes  more  marked.  Like  certain  comets 
astronomers  know  they  must  return,  but  when  or  whence  the  wisest  cannot  foretell. 

Since  1838  the  company  has  insured  only  buildings  used  exclusively  for  dwell- 
ings, and  takes  only  $1,000  on  any  one  risk.  Policy  No.  i  is  still  in  force  on  the 
house  of  the  late  Benjamin  Huntington.  The  first  eight  policies  were  issued  to 
Christopher  Leffingwell.  The  gross  assets  of  the  company  are  about  $13,000  and 
the  net  about  $12,000.  It  has  no  desire  to  extend  its  business  or  make  large 
accumulations. 

The  secretary'  has  always  been  the  executive  officer.  For  many  years  he  received 
an  annual  salary  of  $60,  and  it  now  does  not  exceed  $200. 

Zachariah  Huntington  was  chosen  secretary  in  1794;  Thomas  Tracy,  in  1800; 
Levi  Huntington,  in  1807;  John  Fanning,  in  1812;  Joseph  Williams,  in  1813; 
J.  W.  Kinney,  in  1834;  John  T.  Adams,  in  1835  ;  G.  B.  Ripley,  in  1S36;  Burrel 
Lathrop,  in  1839  ;  Henry  B.  Tracy,  in  1841,  and  Asa  Backus,  the  present  incumbent, 
in  1876. 

An  association  very  similar  was  organized  in  New  Haven  in  1801,  b\-  the  name 
of  the  Mutual  Assurance  Company.  Elizur  Goodrich  was  chosen  secretary  and 
Simeon  Baldwin,  treasurer.     It  soon  passed  out  of  existence. 

Mention  has  already  been  made  of  the  Norwich  Marine  Insurance  Company, 
chartered  in  1803.  Having  found  the  business  unprofitable  its  name  in  181 8  was 
changed  by  act  of  legislature  to  The  Norwich  Fire  Insurance  Company,  and  the 
capital  was  increased  from  $50,000  to  $100,000,  with  the  privilege  of  a  further 
increase  to  not  more  than  $300,000. 

The  directors  fixed  the  capital  at  $100,000,  of  which  fifteen  per  cent,  was  paid 
in  cash  and  the  rest  in  stock  notes.  Joseph  Williams,  as  secretary,  was  the  active 
executive  officer  prior  to  the  abandonment  of  marine  business,  and  filled  the 
position  till  1854.  Presidents,  selected  for  high  standing  in  the  community  and 
changed  often,  were  not  expected  to  become  familiar  with  the  technique.  Till  near 
the  end  of  ]\Ir.  Williams'  administration  the  company  rested  content  with  a  narrow 
field  of  operations.  Both  agents  and  risks  were  carefully  selected.  On  the  whole 
the  returns  on  the  actual  cash  investment  of  the  stockholder  proved  highly  sati-^f^-- 


12  INSURANCE   IN  CONNECTICUT. 

tory.  No  attempt  was  made  to  lay  by  a  surplus.  As  soon  as  a  dollar  reached  the 
treasury  it  was  looked  upon  as  earned.  No  reserve  was  charged  against  it  nor  was 
such  a  charge  required  either  by  custom  or  law.  When  fortune  smiled  the  directors 
met  every  few  weeks  to  divide  the  balance  on  hand.  No  regularity  as  to  time  or 
amount  governed  the  action  of  the  board.  Plenty  followed  famine,  and  famine 
plent}-.  Now  stockholders  rejoiced  over  abundant  showers,  and  now  lamented  over 
withering  droughts.  But  through  both  alike,  ever)'  loss  was  met  with  scrupulous 
care.  The  company  led  off  in  limiting  its  insurance  to  seventj'-five  per  cent,  of 
property  as  valued.  Single  risks  were  restricted  to  $5,000.  It  was  once  its  boast 
that  for  thirty  years  it  had  not  had  a  trial  at  law. 

In  June,  1849,  the  company  was  admitted  into  the  state  of  New  York.  The 
stock  had  been  raised  to  $150,000.  Of  the  assets  about  ;$2o,ooo  were  invested  in 
bank  stocks  in  Norwich  and  Hartford  ;  $10,031  were  reported  as  "cash  on  hand  just 
received  specially  for  investments  ; "  #340  represented  for  several  years  the  supposed 
value  of  twenty-three  shares  of  turnpike  stock  ;  and  the  balance  consisted  of  secured 
notes.  The  business  of  1849,  though  not  large,  began  to  reflect  the  results  of  a  more 
enterprising  policy.  Premiums  reached  $22,056.35  and  interest  $1,204.20.  In 
losses  were  paid  $1 1,270.38  and  in  dividends  $1 1,000.  As  reported  the  gross  assets 
continued  to  barely  touch  $150,000  till  1852,  when  they  slightly  overran  the  nominal 
capital. 

Augustus  Brewster  was  elected  president  in  1854,  ^"^  Ebenezer  Learned,  Jr., 
secretary.  Mr.  Brewster,  a  man  of  force,  was  also  president  of  the  Norwich  and  Wor- 
cester Railroad.     Mr.  Learned  graduated  at  Yale  College  in  1831,  and  was  a  lawyer. 

In  1856  the  stock  notes  were  mostly  taken  up  and  the  proceeds  invested  in 
securities.  The  capital  was  increased  to  $200,000  in  i860,  and  to  $300,000  in  1864. 
Its  losses  in  the  Chicago  fire  of  October,  1871,  so  largely  exceeded  its  assets  that  no 
attempt  was  made  to  continue  its  existence,  although  it  was  the  oldest  stock  fire 
company  in  the  state  and  had  always  maintained  a  high  reputation. 

Presidents  were  Samuel  Woodbridge,  vSimeon  Thomas,  1 807  ;  Thomas  Lathrop, 
1810;  Ebenezer  Huntington,  1S13;  David  Ripley,  1819;  Charles  P.  Huntington, 
1820;  John  Buswell,  1825;  George  L.  Perkins,  1S30;  William  Williams,  Jr.,  1836; 
Lewis  Hyde,  1845;  Charles  Johnson,  1846  ;  John  G.  Huntington,  1849;  Samuel 
Morgan,  1853;  Augustus  Brewster,  1854,  and  Ebenezer  Learned,  1864.  Secretaries, 
Shubael  Breed,  Joseph  Williams,  1814;  Ebenezer  Learned,  1854;  John  L.  Dennison, 
1864,  and  W.  T.  Steere,  186S. 

THE  HARTFORD  FIRE  INSURANCE  COMPANY. 

The  Hartford  Fire  Insurance  Company  was  incorporated  in  18 10,  and  since  the 
Chicago  fire  of  1871,  has  ranked  as  the  oldest  stock  insurance  company  in  the  state. 
The  capital  was  placed  at  $150,000  with  the  privilege  of  enlargement  to  $250,000, 
divided  into  shares  of  fifty  dollars  each.  Subscribers  were  required  to  pay  five  per 
cent,  within  thirty  daj'S  from  the  passage  of  the  act,  and  five  per  cent,  more  within 
sixty  days.  For  the  remaining  ninety  per  cent,  they  were  allowed  to  give  notes 
secured  by  mortgage  on  real  estate,  or  by  satisfactory  indorsements,  payable  thirty 
days  after  demand  by  the  president  and  directors. 

The  subscribers  met  on  the  27th  of  June  at  the  inn  of  Amos  Ransom,  and 
organized  by  electing  as  directors  Nathaniel  Terry,  Nathaniel  Patten,  David  Watkin- 
son,  Daniel  Buck,  Thomas  Glover,  Thomas  K.  Brace,  James  H.  Wells,  Ward  Wood- 
bridge,  aud  Henry  Hudson.  General  Nathaniel  Terry  was  chosen  president,  and 
Walter  IMitchell  appointed  secretary. 


INSURANCE    IN   CONNECTICUT.  13 

In  due  time  fifteen  thousand  dollars  reached  the  treasury  from  cash  payments  on 
capital  account.  How  to  invest  funds  with  a  view  both  to  safety  and  productiveness 
was  then  quite  a  novel  question.  Few  were  confronted  with  the  difficulty,  for  the  great 
majority  had  no  surplus.  Prosperous  farmers  bought  more  land  or  loaned  to  neigh- 
bors on  mortgage.  Prosperous  merchants  extended  their  trade.  Of  the  weil-uigh 
uncounted  millions  of  securities  now  bought  and  sold  at  the  centres  of  excliange,  all 
but  a  tenuous  fraction  rest  upon  forms  of  enterprise  then  unknown.  Brokers  confined 
their  dealings  mostly  to  bonds  of  the  United  States  and  the  several  states,  which 
moved  sluggishly.  Cities  had  not  acquired  the  art  of  piling  up  big  debts.  The 
spirit  of  speculation  found  food  by  rushing  singly  and  in  widely  ramifying  combina- 
tions into  dealings  in  wild  lands. 

At  Hartford  the  Hartford  Bank,  established  in  1792,  loomed  high  amid  the 
general  bareness.  At  this  time  its  capital  exceeded  half  a  million,  and  already  it 
had  won  a  reputation  for  strength  that  has  never  been  clouded.  Hence  the  board 
naturally  turned  to  the  bank.  November  14,  1810,  they  voted  that  Nathaniel 
Terry  and  Nathaniel  Patten  be  a  committee  to  obtain  by  subscription  or  purchase, 
at  discretion,  a  number  of  shares,  not  exceeding  forty,  in  the  stock  of  the  Hartford 
Bank,  and  that  the  pecuniary  funds  of  the  company  be  transferred  to  them  for  the 
purpose.  "  Also,  that  they  obtain  a  loan  from  said  bank  of  such  an  amount  as  they 
shall  judge  requisite  to  effect  said  purpose." 

As  the  par  of  the  shares  was  then  ^400  and  they  commanded  a  premium  of  four 
per  cent.,  the  committee  would  have  needed  $  1 6, 640  had  they  decided  to  go  to  the 
limit  allowed  by  the  vote.  November  27th,  $16,224  were  placed  to  their  credit,  the 
excess  over  gi  5,000  having  been  borrowed.  But  the  matter  was  too  vital  for  hurried 
action.  After  duly  weighing  the  pros  and  cons,  the  committee  on  the  13th  of  De- 
cember bought  fourteen  shares  at  $5,824,  returning  the  balance  to  the  treasury. 
October  29,  18 17,  the  investment  had  grown  to  one  hundred  shares,  bought  at  a 
total  cost  of  $43,684. 25.  The  company  now  holds  five  hundred  and  fifty-six  shares 
of  the  bank  stock  (par  reduced  to  100)  representing  a  cost  of  $63,962.75,  considerably 
less  than  one-fifth  of  the  dividends  received  upon  it. 

In  1 8 10  fire  insurance  was  supposed  to  be  a  matter  of  pure  chance.  No  attempt 
had  been  made  to  generalize  the  laws  underlying  the  business.  Indeed  the  existence 
of  such  laws  was  unsuspected,  except  possibly  by  some  deep  thinker,  who  passed  for 
a  visionary.  Facts  were  ungathered.  Hardly  a  contribution  had  been  made  to  the 
literature  of  the  subject,  which  now  loads  the  shelves  of  large  libraries.  Amid  preva- 
lent darkness  pioneers  could  only  experiment.  Hence  charges  to  the  insured  often 
bore  no  close  or  fair  ratio  to  the  cost.  Some  paid  too  little,  and  others  too  much. 
The  rates  must  be  low  enough  to  attract  patrons,  and  high  enough  to  pay  losses. 

An  address  read  before  a  meeting  of  agents  held  at  Niagara  Falls,  June  9,  1885, 
by  Charles  B.  Whiting,  formerly  secretary-  of  the  Hartford,  and  later  president  of  the 
Orient,  contains  much  curious  information  respecting  this  and  other  companies  of 
the  city. 

Policy  No.  I  of  the  Hartford  covered  a  builder's  risk  of  $4,000  for  three  months 
at  twelve  and  one-half  cents.  No.  5  took  $11,000  on  a  gin  distillery  at  one  and 
one-fourth  per  annum.  No.  21,  $20,000  on  a  stock  of  dry-goods  at  seventy-five 
cents.  No.  22,  $20,000  on  a  stock  of  hardware  at  twenty-five  cents.  Within  a  few 
weeks  from  birth  the  company  was  taking  single  risks  thirty-three  per  cent,  in  excess 
of  its  entire  cash  assets. 

The  hazard  was  less  than  it  seems,  for  the  character  of  the  insured,  though 
unmentioned  in  the  policy,  formed  one  of  the  most  important  elements  in  the  cm- 


14  INSURANCE   IN   CONNECTICUT. 

tract.  Every  risk  was  accompanied  by  a  survey  of  the  property,  and  the  written 
representations  of  the  owner  had  the  force  of  a  guaranty.  Persons  desiring  insurance 
solicited  it  as  a  privilege  from  the  officers  of  the  company,  and,  being  required  to 
carry  themselves  a  material  part  of  the  hazard,  the  two  parties  to  the  agreement 
became  partners  in  the  venture.  A  man  of  bad  reputation  found  difficulty  in  obtain- 
ing a  policy  on  any  terms.  At  first  no  commission  was  paid  to  agents,  their  com- 
pensation coming  from  the  survey  and  policy  fee,  which  varied  with  the  labor,  and 
was  collected  from  the  assured. 

Then,  too,  the  population  was  homogeneous  and  almost  entirely  of  English 
parentage.  The  spirit  of  Puritanism  still  pervaded  New  England.  Branded  often 
by  latter-day  critics  as  cruel  and  ridiculed  as  narrow,  it  is  admitted  to  have  encour- 
aged the  growth  of  the  rugged  virtues.  What  will  be  the  final  product  of  the  inflow 
and  mixture  of  many  races  no  one  can  foretell.  Few  will  deu)-,  however,  that  at  the 
present  stage  of  progress,  the  process  has  increased  the  perils  of  underwriting. 

For  nine  months  ended  April,  i8i  i,  premiums  were  $2,784.5 1  ;  interest  and  divi- 
dends, ^638.53,  making  total  income  ;$3, 423.04.  The  first  full  fiscal  year  ended  April, 
1812,  with  premiums  of  53,542.25,  and  $956.03  interest,  a  total  of  $4,498.28.  For  the 
year  ended  April,  1820,  the  premiums  were  $5,258.48,  and  the  interest  $2,808.05; 
total,  $8,066.53. 

Why  did  the  company  grow  so  slowly  during  the  first  decade?  Because  money- 
making  was  a  secondary  consideration.  The  gathering  at  Ransom's  Inn  was  made 
up  of  men  of  affairs,  owners  of  stores,  merchandise,  shops  and  homes.  Occasional 
fires  fell  crushinglv  upon  sufferers.  In  an  hour  one  might  see  the  slow  savings  of  a 
life — the  support  of  age,  the  provision  for  children — swept  awa}'  forever.  Eike  the 
sword  of  Damocles,  the  threat  hung  by  a  thread.  Nearly  every  one  in  trade  or  in  the 
workshop  had  his  property  collected  in  one  spot,  liable  to  utter  destruction  in  a 
single  catastrophe.  A  sense  of  ever-present  peril,  a  desire  to  avert  the  worst  effects 
of  calamity  from  the  immediate  sufferer  by  distributing  the  loss  through  the  com- 
munity, and  a  willingness  to  contribute  fairly  to  the  common  fund,  brought  the 
company  into  existence.  Doubtless  the  subscribers  hoped  to  make  a  profit.  Money 
set  aside  to  guarantee  the  performance  of  hazardous  contracts,  entitled  depositors  to 
more  than  the  ordinary  rate  of  interest.  Still  dividends  above  the  current  rate  were 
rather  a  matter  of  hope  than  faith.  Not  till  long  after  the  venture  was  launched  and 
the  hands  that  laid  the  keel  had  turned  to  dust,  did  its  commercial  possibilities  fairly 
dawn  ui^on  fortunate  holders  of  the  stock. 

Again,  as  insurance  was  a  novelt}-,  the  unappreciative  held  aloof  on  the  theory 
that  ways  good  enough  for  their  grandfathers  were  good  enough  for  them.  In  every 
thing  the  mind  was  much  less  receptive  of  new  ideas  then  than  now.  The  pioneers 
did  a  great  deal  of  missionary  work  in  uprooting  prejudice  and  making  converts  to 
the  doctrine  that  insurance  is  both  a  privilege  and  a  duty. 

In  planting  agencies  the  board  did  not  begin  near  home,  or  in  large  cities,  but 
in  small  and  remote  towns.  In  181 1  Ebenezer  F.  Norton,  of  Canandaigua,  N.  Y., 
was  commissioned  to  take  insurance  and  countersign  policies.  In  June,  18 14,  Ephraim 
Kingsbury  was  appointed  at  Haverhill,  Mass.,  and,  in  February,  18 16,  Hooker  and 
Brewster,  at  Middlebur\-,  \'t.,  with  authority  to  insure  "houses,  furniture,  stores, 
merchandise  and  barns  only,"  they  to  retain  fifty  cents  on  each  policy.  October, 
1 8 19,  Hooker  Leavitt  was  appointed  for  Greenfield,  Mass.,  and,  in  addition  to  the 
charge  for  policies,  was  allowed  five  per  cent,  on  premiums  received.  In  1S20,  James 
S.  Seymour  was  appointed  at  Auburn,  N.  Y.,  and  Samuel  Cowls  at  Cleveland,  Ohio. 

For  ten  years  the  company  was,  apparently,  experimenting  with  the  agency  sys- 


INSURANCE   IN   CONNECTICUT.  15 

tem.  In  1821  it  entered  upon  a  much  more  vigoroTis  policy,  appointing^  Anson  G. 
Phelps  at  New  York  city,  George  Wales  at  Boston,  Roger  S.  Skinner  at  New  Haveu, 
and  others  elsewhere.  Thenceforth  the  net-work  was  rapidly  extended.  The  ques- 
tion of  entering  a  town  ceased  to  be  a  matter  of  grave  deliberation,  and  was  followed 
b}'  the  question,  Who  is  the  best  man  to  represent  us?  In  July,  1822,  the  board 
voted  that  the  agents  at  New  Haven,  Canandaigiia  and  Middlebury  "  be  allowed  ten 
per  cent,  commission  on  all  premiums  received  by  them  exceeding  one  thousand 
dollars  for  any  one  year,  commencing  the  current  year."  Other  contracts  continued 
at  five  per  cent.,  and  numbers  were  afterwards  made  at  the  same  rate. 

Rigid  ideas  then  pre\-ailed  respecting  the  use  of  corporate  funds  except  for  strictly 
corporate  purposes.  Still,  the  rule  was  now  and  then  broken.  November  17,  18 18, 
the  board  voted  to  five  persons  gratuities  amounting  to  sixty  dollars,  "  in  considera- 
tion of  their  active,  laudable  and  successful  exertions  in  extinguishing  the  fire  in 
this  cit\-  on  the  evening  of  the  2nd  November  inst. "  November  30,  18 19,  they  voted 
that  twenty  dollars  be  paid  by  the  company  towards  procuring  a  watch  for  the  city. 
The  watch,  developed  later  into  the  police  system,  was  at  first  supported  by  volun- 
tary contributions,  though  its  duties  and  powers  were  defined  by  the  common  council. 

In  June,  1822,  the  board  ratified  the  contract  entered  into  by  Roger  S.  Skinner, 
agent  at  New  Haven,  with  a  committee  of  the  New  Haven  Fire  Insurance  Company, 
to  indemnify  it  against  all  loss  and  damage  by  fire  in  consequence  of  any  outstanding 
polic}-.  They  also  directed  the  president  and  secretary  to  execute  a  bond  in  the 
penal  sum  of  $150,000  for  the  faithful  execution  of  the  contract. 

Secretary  Mitchell  received  an  annual  salary  of  $300,  with  an  allowance  of  $30 
for  rent,  the  business  of  the  company  being  transacted  in  his  private  office,  till  18 13, 
■when  it  was  raised  to  ;$330  from  January.  The  next  year  it  was  again  raised  to  ^360, 
and  by  1824  it  had  mounted  upward  to  ^460,  with  an  allowance  of  $55  for  office  rent 
and  stationery,  but  this  was  high  water-mark,  for  in  1830  it  was  cut  down  to  $450, 
in  183 1  to  ;g30o,  and  in  1832  to  $200. 

He  had  no  assistance  at  the  desk  till  February,  1829,  when  Lewis  Bliss  wds 
appointed  clerk.  The  star  of  the  clerk  waxed  as  that  of  the  secretary  waned,  for 
within  three  months  he  was  sent  to  Georgia  to  adjust  losses  occurring  in  the  Augusta 
and  Savannah  agencies,  with  authority  to  draw  drafts  on  the  company,  payable  sixty 
days  from  time  of  proof  His  salary,  too,  beginning  at  $500,  was  increased  to  $600 
in  1832,  and  to  gSoo  in  1835. 

President  Terry  received  no  salary  till  May  31,  1823,  when  ^100  was  voted  him  for 
services  during  the  previous  six  months.  It  continued  at  the  rate  of  $200  per  annum 
till  May,  1835,  when  for  the  previous  half  year  he  was  voted  an  additional  hundred. 
No  salaries  were  fixed  in  advance,  but  were  voted  semi-annually,  for  work  already 
performed. 

Not  a  loss  occurred  the  first  year,  and  for  the  next  three  they  amounted,  all  told, 
to  ;g42i.84  only.  Again,  from  April,  1S20,  to  November,  1823,  they  amounted  to  but 
^^66.25.  The  year  ended  November,  1827,  proved  over  five  times  as  disastrous  as  the 
worst  that  preceded,  the  losses  reaching  ^37,567.67,  but  this  was  a  season  of  happi- 
ness compared  with  1829,  when  they  rose  to  ^89,469.59. 

For  the  twenty  years  ended  April,  1830,  total  income  was  ^24 1,297. 29,  made  up 
of  premiums  ;g2i9,640.97,  and  net  interest  $2 1,656. 32.  Disbursements,  on  the  other 
hand,  reached  ^327,818.47,  made  up  of  losses,  ^175,926.65  ;  expenses,  ^29,791.91 ;  and 
dividends,  $122,100.  At  this  time  the  capital  was  impaired  $42,907.14.  Mays, 
1829,  the  board  designated  Eliphalet  Terry  and  David  Watkinson  a  committee  to 
eflfect  a  loan  at  the  Hartford  Bank  for  an  amount  not  exceeding  $60,000,  and  to 


16  INSURANCE   IN   CONNECTICUT. 

pledge  as  security  the  stock  of  the  company  in  the  bank  and  the  stock  notes  for  the 
third  installment.  At  this  juncture  the  shareholders,  over  and  above  the  securities 
in  the  treasury,  were  liable  for  about  fifteen  per  cent,  on  their  stock  notes,  barely  to 
wipe  out  the  deficiency,  Against  this  minus  quantity,  owners,  endowed  with  a 
faculty  for  seeing  the  bright  side,  might  put  as  an  offset  the  good-will  and  established 
business  of  the  company. 

All  our  early  insurance  companies  made  the  deadly  mistake  of  dividing  profits  in 
periods  of  prosperity,  resei-ving  little  or  nothing  to  meet  the  drains  of  adversity. 
Only  two  or  three  survived  the  wounds  inflicted  by  the  policy.  These  were  saved  in 
several  crises  by  the  heroism  of  the  directors,  who,  by  guaranties,  threw  their  private 
fortunes  into  the  breach. 

Growing  dissatisfaction  came  to  a  head  in  1835,  when  the  official  connection  of 
General  Terry  and  Mr.  IMitchell  with  the  company  was  brought  to  an  end.  General 
Nathaniel  Terry  w-as  born  at  Enfield,  Conn.,  January  30,  1768;  graduated  at  Yale 
College  in  1786;  studied  law  ;  moved  to  Hartford,  and  was  long  a  leading  figure  in 
the  state.  He  represented  the  town  twelve  sessions  in  the  General  Assembly  ;  was 
judge  of  the  county  court,  1807-9  i  member  of  the  Fifteenth  Congress  ;  of  the  Con- 
stitutional Convention  of  1818,  and  mayor  of  the  city,  1824-31.  He  was  president 
of  the  Hartford  Bank,  1819-1828.  Hemarried,  in  1798,  Catharine,  daughter  of  Gen. 
Jeremiah  Wadsworth,  of  whom  a  sketch  has  been  given.  General  Terr}'  commanded 
the  governor's  foot-guard  from  1802  to  1813.  Six  feet  and  four  inches  tall,  erect  and 
imperious,  he  appeared  in  uniform  the  born  soldier.  On  parade  or  in  debate  he  was 
at  home.  In  business,  however,  he  was  much  less  successful.  He  died  at  New 
Haven,  June  14,  1844.     Gen.  Alfred  H.  Terry,  captor  of  Fort  Fisher,  was  a  grandson. 

Walter  Mitchell  is  represented  as  somewhat  heavy  in  person  and  intellect.  At 
first  parties  desiring  insurance  were  compelled  to  seek  the  broker.  Competition 
soon  changed  the  relations  of  the  parties  to  the  contract,  but  Mr.  Mitchell  did  not 
drop  with  alacrity  into  new  ways.  It  is  said  of  him  that  he  was  averse  to  doing 
to-day  what  could  conveniently  be  put  off  till  to-morrow. 

In  June,  1835,  Eliphalet  Terry  became  president,  James  Bolles  secretary,  and  in 
July,  C.  C.  Lyman,  assistant  secretar>'.  Mr.  Lyman  held  the  place  forty-three  years, 
refusing  all  offers  of  promotion.  Six  months  of  remarkable  prosperity  followed  the 
installation  of  the  new  management,  and,  in  December,  a  supper  was  given  to  cele- 
brate the  coming  dividend,  which,  however,  was  doomed  to  disappear  in  smoke,  for 
the  next  day  came  news  of  a  great  fire  in  New  York  city.  The  losses  of  the  com- 
pany reached  ^84,973.34,  but  the  crisis  was  met  with  a  courage  that  turned  a 
calamity  into  a  blessing,  bringing  at  once  a  large,  permanent  and  profitable  enlarge- 
ment to  the  volume  of  its  business.  Mr.  Terry,  having  pledged  his  own  property  to 
the  Hartford  Bank  as  security  for  drafts  to  be  drawn,  with  Mr.  Bolles,  started  in  a 
sleigh,  with  the  mercury  below  zero,  to  grapple  in  person  with  the  issue.  On  arriv- 
ing in  the  city,  they  found  most  of  the  insurance  companies  bankrupt,  and  a  state  of 
desi)ondency  bordering  on  panic.  Property-owners  outside  of  the  burned  district  felt 
that  they  were  no  longer  protected,  while  the  actual  sufferers  looked  for  small  divi- 
dends on  their  policies.  Mr.  Terry  announced  that  he  would  pay  in  full  all  losses  of 
the  Hartford,  and  take  new  insurance.  The  promise — the  first  sign  of  cheer  in  the 
gloom — was  fulfilled  to  the  letter.  Business  poured  in  at  highly  renumerative  rates, 
and  the  deep  gap  in  its  assets  was  soon  refilled.  Premiums  rose  from  $19,260. 1 5  for 
six  months  ended  April,  1835,  to  ;g97,84i.75  for  the  corresponding  term  the  next 
year.  The  day  of  small  things  had  passed.  Thenceforth,  both  for  good  and  for  ill, 
the  annual  operations  of  the  company  have  been  expressed  in  large  and  ever-swelling 
figures. 


INSURANCE   IN   CONNECTICUT.  17 

Dividends  were  omitted  from  November,  1829,  till  November,  1841,  inclusive, 
and  again  from  April,  1846,  to  April,  1853,  inclusive. 

Between  July  19,  1845,  and  May  18,  1849,  fires  occurred  at  New  York  city,  St. 
John's,  N.  F.,  Nantucket,  Albany,  and  St.  Eouis,  which  cost  the  Hartford  $6g,6gi.^o, 
$84,014.75,  $54,521.65,  ;g57,637.43,  and  ;g58,676.83,  respectively,  making  a  total  of 
$324,577.96,  in  addition  to  ordinary  losses.  St.  John's  was  burned,  June  9,  1846. 
Mr.  Bolles  hastened  thither  and  made  settlements  by  giving  the  notes  of  the  com- 
pany. Landing  from  the  steamer  at  Boston  on  the  way  home,  he  was  informed  of 
the  fire  in  Nantucket,  and  there  repeated  the  dreary  routine.  Meanwhile  notes 
given  for  unpaid  installments  on  stock  no  longer  sufficed  to  uphold  the  credit  of  the 
compau}'.  To  avert  bankruptcy  directors  freely  indorsed  its  paper.  Some  signed 
their  names  expecting  that  the  necessity  of  meeting  the  obligation  would  ultimately 
fall  upon  them  personally.  Yet  in  the  absence  of  sustaining  faith  such  was  the  esprit 
de  corps  that  they  took  the  risk.     The  earnestness  of  a  few  moved  the  mass. 

In  1850,  when  the  fiery  epoch  already  mentioned  drew  to  a  close,  after  deducting 
unpaid  losses  and  claims,  the  company  was  able  to  muster  ;gis8,44i.58  in  assets,  of 
which  $87,000  consisted  of  stock  notes.  Among  the  investments  the  supporting 
column  was  four  hundred  and  fifty-three  shares  of  Hartford  Bank  stock,  estimated 
at  $49,589.75.  On  the  other  hand,  one  hundred  and  twenty  shares  of  Connecticut 
River  Company  stock,  valued  at  $12,000,  and  ninety-five  shares  of  Hartford,  Provi- 
dence and  Fishkill  Railroad,  valued  at  $9,500,  were  made  to  carry  a  much  heavier 
load  than  they  could  rightfully  bear. 

At  the  annual  meeting,  in  1849,  Eliphalet  Terry  declined  a  re-election  on  account 
of  ill  health,  and  Hezekiah  Huntington  was  made  president.  Born  at  Enfield,  De- 
cember 25,  1776,  Mr.  Terry  caine  to  Hartford  at  the  age  of  nineteen.  At  the  death 
of  his  employer  he  succeeded  to  the  business,  and  taking  into  partnership  his  brother 
Roderick,  built  up  the  house  of  E.  &  R.  Terry,  the  leading  Hartford  firm  in  the 
West  India  trade,  and  one  of  the  largest  wholesale  grocery  houses  in  the  Connecticut 
Valle}-.  Their  store  was  located  at  the  corner  of  North  Main  street  and  Albany 
avenue.     He  died  July  8,  1849. 

By  an  act  amending  the  charter  passed  in  1853,  the  company  was  authorized  to 
increase  the  capital  to  an  amount  not  exceeding  $300,000,  and  to  change  the  shares 
from  $50  to  $100  each.  Both  amendments  were  accepted.  The  amendment  of  1857 
authorized  an  increase  to  $1,000,000,  and  the  amendment  of  1865  to  $3,000,000.  At 
a  special  meeting,  held  February  2,  1854,  the  stockholders  voted  unanimously  to 
raise  the  capital  to  $300,000.  Subscribers  for  the  additional  shares  agreed  to  pay  sixty 
per  cent,  in  cash,  or  by  notes,  dated  March  i,  1854,  payable  in  one  year  with  interest, 
and  the  other  forty  per  cent,  in  the  regulation  stock-notes,  which  had  not  yet 
fallen  into  discredit.  Still  the  prosperity  of  the  company  was  such  that  these  were 
rapidly  extinguished.  July  14,  1857,  profits  in  the  treasury  were  capitalized  to  the 
extent  of  $200,000,  making  the  capital  $500,000,  which  by  the  same  process  was 
lifted  to  a  round  million  in  June,  1864. 

A  long  period  of  exemption  from  notable  disasters  was  followed  in  swift  succes- 
sion by  fires  at  Augusta,  Maine,  September  16,  1865  ;  at  Portland,  July  4,  1866,  and 
at  Vicksburg,  December  24,  1866,  involving  losses  of  $57,022.16,  $151,288.31,  and 
#55)077-55  respectively.  But  the  company  was  now  much  better  prepared  to  with- 
stand the  strain,  and  even  after  the  extraordinary'  payments  at  Portland  and  Vicks- 
burg, was  able  to  add  over  $200,000  to  its  assets  from  the  business  of  1866. 

After  an  incumbency  of  fifteen  years  Mr.  Huntington  retired  in  1864.     He  was 
born  October  28,  1795,  at  Suffield,  Conn.,  whence  the  familv  moved  to  Hartford  in 
•1 


18  INSURANCE   IN  CONNECTICUT. 

1813.  Alone  and  in  partnership  with  his  brother,  Frank  J.  Huntington,  lie  pub- 
lished various  works,  including  the  Greek  text-books  of  Prof.  Sophocles,  at  a  time 
when  this  was  one  of  the  leading  activities  of  the  city.  He  died  Februaiy  20,  1865. 
His  father,  also  named  Hezekiah,  moved  from  Tolland  to  Suffield.  In  1806  Mr. 
Jefferson  appointed  him  United  States  Attorney  for  Connecticut,  and  he  filled  the 
office  till  1829. 

T.  C.  AUyii  succeeded  Mr.  Huntington.  His  term  was  short,  for  in  May,  1867, 
he  resigned  and  went  to  New  York  city,  where  he  formed  a  partnership  with  Ezra 
White,  who  had  long  been  local  agent  of  the  company.  The  firm  also  managed  the 
American  branch  of  the  North  British  and  Mercantile  Insurance  Company  of  Loudon 
and  Edinburgh. 

The  company  had  grown  to  such  proportions  that  the  directors  now,  for  the  first 
time,  went  outside  of  the  city  to  seek  a  president,  and  the  choice  fell  upon  George 
L.  Chase,  assistant  general  agent  of  the  western  department.  Mr.  Chase  engaged 
in  insurance  at  the  age  of  nineteen,  and  in  early  manhood  broadened  his  experience 
by  serving  as  assistant  superintendent  and  superintendent  of  the  Central  Ohio  Rail- 
road, re-entering  the  insurance  field  in  i860.  Although  born  in  Massachusetts,  Mr. 
Chase  had  acquired  a  liking  for  western  ways,  and  hence,  with  some  hesitation, 
accepted  the  place  in  1867.  His  previous  connection  had  made  him  familiar  with 
the  affairs  of  the  company,  and  besides  he  brought  to  the  new  position  a  close  ac- 
quaintance with  the  men  and  methods  of  a  great  and  growing  region. 

From  the  middle  of  the  century  the  Hartford  pushed  westward  and  southward 
with  great  vigor,  having  the  headquarters  of  a  new  department  at  Columbus,  Ohio, 
under  charge  of  Denias  Adams,  appointed  in  1852,  and  later  of  David  Alexander, 
appointed  in  October,  1854.  When  the  Rebellion  cut  off  relations  with  the  South 
the  western  office  was  transferred  to  Chicago,  where  G.  F.  Bissell  succeeded  Alex- 
ander in  1863,  and  at  the  end  of  the  war  the  loss  of  receipts  from  the  Southern  states 
had  nearly  been  made  good  by  extensions  in  the  Northwest. 

With  the  increase  of  population  further  subdivisions  became  expedient.  In 
1 87 1  the  Pacific  Coast  department  was  organized,  and  in  1889  the  Metropolitan,  made 
up  of  parts  of  New  York  state,  Long  Island  and  New  Jersey. 

The  advent  of  Mr.  Chase  marks  the  beginning  of  a  more  aggressive  era,  and 
figures  afford  the  most  trustworthy  measure  of  results.  At  the  end  of  December, 
1867,  the  assets  of  the  company  were  $2,026,220.79;  liabilities:  capital,  $1,000,000; 
unpaid  losses,  ;g  167, 350. 23;  unpaid  dividends,  5i44;  reinsurance  reserve  at  an  aver- 
age of  fifty  per  cent,  of  unexpired  premiums,  $831,975.87;  total,  $1,999,476. 10,  leav- 
ing a  net  surplus  of  $26,744.69. 

The  income  for  the  year  reached  $1,673,582.69,  of  which  the  main  sources  were 
premiums,  $1,559,040.09,  and  dividends  and  interest  $102,688.07. 

The  new  administration  attempted  nothing  sensational  or  revolutionary,  but 
simply  crowded  the  established  policy  with  more  vigor.  It  aimed  to  have  an  agency 
at  every  settlement  in  the  United  States  and  Canada,  where  income  bid  fair  to  exceed 
outgo,  thus  reinforcing  the  streams  from  large  cities  by  contributions  from  many 
rivulets.  Its  age,  reputation  and  resources  attracted  everywhere  agents  of  the  highest 
character  and  business  of  the  best  quality. 

A  season  of  long,  unbroken  sunshine  was  cruelly  interrupted  by  the  Chicago 
fire  of  October,  1871,  coming  like  a  hurricane  on  a  still  summer  day.  In  a  few  hours 
property  valued  at  $150,000,000  was  destroyed,  and  while  the  embers  were  still  hot, 
it  was  known  at  the  home  office  that  the  losses  of  the  Hartford  would  reach  nearly 
$2,000,000.     So  many  companies  were  broken  by  the  catastrophe  that   a  flood  of 


insurancp:  in  Connecticut.  19 

securities  must  lall  upon  the  market,  depressing  prices  and  rendering  the  fulfilhnent 
of  contracts  still  more  difficult.  In  times  of  gloom  the  managers  always  turned  to 
the  Hartford  Bank  as  an  unfailing  refuge.  To  an  appeal  for  help  the  bank  now 
replied  that  it  would  aid  to  the  full  extent  of.  its  resources.  The  courage  of  both — 
the  one  struggling  for  existence  and  the  other  not  less  for  the  honor  of  the  city  than 
to  save  an  old  comrade — seems  almost  a  matter  of  course,  as  realities  fade  in  the  dis- 
tance, but  then  amid  the  wreckage  lifted  the  actors  out  of  the  world  of  common- 
place into  the  realm  of  the  heroic.  The  Connecticut  Mutual  Life  also  loaned  the 
company  half  a  million.  The  Hartford  settled  every  loss  in  full,  paying  out  $1,968, - 
225.  A  bare  million — a  sum  insufficient  to  meet  the  requirements  of  the  re-insur- 
ance fund — was  left  in  the  treasury.  By  a  vote  of  the  directors  the  capital  was 
reduced  to  $500,000,  and  at  once  increased  to  $1,000,000  by  fresh  subscriptions,  the 
rights  to  subscribe  commanding  a  premium  of  $85  a  share  in  the  darkest  days  of  the 
disaster.  Thirteen  months  later,  November  9,  1872,  it  incurred  losses  amounting  to 
^485, 356  at  the  Boston  fire,  but  met  the  drain  out  of  current  receipts. 

The  Hartford  Fire  owned  a  block  of  stock  in  the  Ocean  National  Bank  of  New 
York  city,  which,  in  December,  1871,  passed  into  the  hands  of  Theodore  M.  Davis 
as  receiver.  It  had  already  been  looted  by  burglars  and  badly  burned  by  the  pa- 
tronage of  William  M.  Tweed  and  his  associates.  January  19,  1872,  the  receiver 
issued  a  printed  circular  in  which  the  excess  of  resources  over  all  liabilities,  includ- 
ing the  amount  due  depositors,  was  estimated  at  $587,313.02.  He  stated  that  with 
good  management  and  good  luck  the  assets  ought  to  yield  a  much  larger  simi.  The 
only  cloud  then  apparent  on  the  horizon  grew  out  of  the  suits  for  the  recovery  of  the 
value  of  certain  United  States  bonds,  left  in  the  bank  for  safe-keeping  and  carried 
off  by  burglars  in  1869.  In  the  event  that  those  cases  were  decided  adversely,  he 
thought  the  above  surplus  might  be  diminished  by  $200,000.  The  bank  won  these 
suits,  but  before  the  trial,  by  way  of  caution  to  the  stockholders  not  to  sacrifice  their 
interests,  in  a  circular  dated  July  i,  1873,  the  receiver  virtually  promised  a  dividend 
of  thirty-four  (34)  per  cent,  to  stockholders,  after  discharging  all  obligations  to 
depositors. 

July  I,  1875,  the  receiver  reported  the  assets  remaining  in  his  hands,  "  uncol- 
lected and  not  charged  off  as  worthless,"  at  $1,302,51 1. 81.  He  also  held  the  Port- 
age Lake  Canal  Company  debt,  amounting  with  interest  to  $560,000,  and  expressed 
the  conviction  that  this  debt  was  secure  and  would  ultimately  be  collected.  At  the 
same  time' the  total  obligations  of  the  bank  were  given  as  $390,395.63  only. 

Affairs  drifted  along  for  eighteen  months  more,  when  the  shareholders  were 
rudely  awakened  from  dreams  of  prospective  dividends  by  a  printed  notice,  dated 
January  25,  1877,  announcing  that  an  assessment  of  forty  (40)  per  cent,  had  been 
levied  upon  them  to  pay  off  the  creditors.  The  receiver,  with  his  customary  disposi- 
tion to  make  things  pleasant,  intimated  that  the  comptroller  of  the  currency  was  at 
the  same  time  reserving  for  the  stockholders  assets  which  would  ultimately  yield  a 
large  sum,  but  which  coiild  be  sold  then  only  at  heavy  sacrifice.  He  declared  it  to 
be  a  part  of  the  plan  to  collect  upon  these  as  soon  as  possible  and  to  apply  the  pro- 
ceeds to  their  benefit. 

The  circular  awakened  no  small  degree  of  astonishment  and  wrath  in  Eastern 
Connecticut,  where  for  some  reason  the  bank  shares  had  been  a  favorite  investment. 
A  promised  dividend  of  nearly  sixty  per  cent,  had  dwindled  to  thirty-four,  only  to  be 
transmuted  further  on  into  an  assessment  of  forty.  A  call  was  sent  out  to  interested 
parties  to  meet  at  the  office  of  the  Hartford  Fire.  Representative  men  came  together 
from  several  counties  to  consider  the  matter. 


20  INSURANCE   IN  CONNECTICUT. 

Mr.  Chase  advocated  the  most  vigorous  and  aggressive  resistance  to  the  demand 
until  the  facts  of  the  receivership  could  be  unearthed  and  laid  bare.  He  took  the 
position  that  on  the  ground  of  sound  public  policy  it  was  just  as  much  the  duty  of 
the  executive  officers  of  insurance  companies  and  savings  banks  to  resist  unjust  or 
fraudulent  claims  as  to  pay  such  as  were  just.  He  urged  that  all  unite  in  employing 
the  best  talent  to  trace  the  assets  from  the  vaults  of  the  bank  into  the  pockets  whither 
they  had  disappeared,  and  if  necessary  to  assault  the  comptroller  of  the  currency  in 
his  stronghold  to  learn  why  through  thick  and  thin  he  upheld  an  appointee  who  by 
his  own  circulars  was  convicted  of  playing  high-handed  tricks  with  his  trust. 

The  earnest  appeal  of  Mr.  Chase  brought  several  to  the  support  of  the  plan,  but 
the  times  discouraged  heroic  action.  Just  then  the  country  was  suffering  the  severest 
strain  of  the  long  depression  that  began  with  the  panic  of  1873.  The  air,  charged 
with  timidity  and  distrust,  overpowered  resolution.  All  appreciated  the  sniokiness 
of  the  record  as  developed  in  the  successive  circulars  of  the  receiver,  but  the  majority 
saw  no  hopeful  method  of  redress.  The  assessments  were  paid  with  much  the  same 
feelings  that  the  belated  traveler  on  the  lonely  moor  surrenders  his  purse  at  the 
muzzle  of  the  pistol. 

Nearly  a  quarter  of  a  century  has  passed  since  the  comptroller  of  the  currency 
and  his  appointee  took  charge  of  assets  estimated  to  exceed  all  liabilities  by  over  half 
a  million  of  dollars.  That  large  sum  has  vanished.  The  bottomless  pit  has  swal- 
lowed four  hundred  thousand  more,  wrung  by  arbitrary  orders  from  shareholders,  not 
a  few  of  them  widows  and  orphans.  Out  of  all  the  property  not  a  cent  has  been  paid 
to  the  owners  of  residuary  interests. 

Perhaps  undue  space  has  been  given  to  this  episode.  The  general  adoption  of 
the  course  advocated  in  this  instance  by  Mr.  Chase  would  go  far  to  prevent  such 
scandals  and,  where  failures  have  occurred,  to  secure  a  just  distribution  of  the  salvage. 

During  Walter  Mitchell's  connection  with  the  company  the  business  was  carried 
on  in  his  law  office  on  the  site  now  occupied  by  the  Courant  building.  In  1835,  its 
rooms  were  moved  one  door  eastward.  In  1854,  the  company  took  quarters  on  Main 
street,  north  of  Pratt,  and  with  one  more  change  in  the  interim  removed  to  its 
own  building,  at  the  corner  of  Pearl  and  Trumbull,  in  1870.  The  structure  built  of 
Quincy  granite,  having  a  frontage  of  sixty  and  a  depth  of  one  hundred  feet,  aud  ris- 
ing four  stories  abo\-e  the  basement,  served  its  purposes  for  twenty-six  years.  To 
meet  the  needs  of  a  business  that  has  grown  far  more  rapidly  than  either  officers  or 
directors  deemed  possible  a  quarter  of  a  century  ago,  the  company  in  1896-7  built  an 
addition  forty-four  by  seventy-two  feet,  six  stories  high,  with  a  front  also  of  Quincy 
granite.  The  old  part  was  raised  one  story  and  both  are  surmounted  by  a  continuous 
fire-proof  roof,  supported  by  steel  beams  and  girders.  By  the  removal  of  the  division- 
wall  the  first  floor  is  thrown  into  a  single  room,  sixty-four  b)'  seventy  feet.  Here 
the  main  clerical  work  of  the  company  is  performed  under  the  eyes  of  the  officers. 
The  new  part  is  fire-proof,  and  the  security  of  the  old  has  been  greatly  increased.  In 
the  rear  of  the  office,  besides  a  large  room  for  private  consultations,  is  an  additional 
fire-proof  vault,  sixteen  by  twenty-four  and  seventeen  feet  high,  for  the  storage  of 
books  and  valuable  documents.  The  upper  floors  are  rented  for  offices  and  bachelor 
apartments. 

Out  of  profits  a  stock  dividend  of  twenty-five  per  cent,  was  declared  in  1877, 
raising  the  capital  to  $1,250,000.  At  that  point  it  has  since  remained,  all  gains  going 
to  swell  the  surj^lus.  Thus  far  the  officers,  supported  by  a  conservative  directory, 
have  stubbornly  resisted  all  attempts  to  increase  the  stock-liability. 

The  successors  of  James  G.  BoUes  in  the  secretaryship  have  been  Charles  Taylor, 


N.  TERRV, 
President  1810-35 


THUS.  TURNBULL, 
Assistant  Secretary, 


GKO.  L.  CHASE, 
President  1867. 


E.  1  EKRY, 
President  18,55-49. 


CHAS    E.  CHASE, 
Assistant  Secretary. 


H.  HUNTIXGTON- 
President  1849-64. 


W.  MITCHELL, 
First  Secretary. 


T.  C.  Al.LYN, 
President  1864-67. 


THE   HARTFORD  FIRE   INSURANCE  COMPANY. 


INSURANCE   IN  CONNECTICUT.  21 

1S50-2  ;  A.  F.  Wilmarth,  1S52  (for  six  monllis) ;  Caleb  I!.  Bowers,  1853-July  i,  1858; 
Timothy  C.  AUyn,  August  5,  1858-June  2,  1864;  George  M.  Coit.Juue  2,  1864-Feb- 
riiary  i,  1870;  John  D.  Browne,  February  i,  1870-November  i,  1880;  Charles  B. 
Whiting,  November  20,  1880-June  i,  1886;  Philander  C.  Royce,  since  June  i,  1886. 

Mr.  Wilmarth  was  afterwards  vice-president  of  the  Home  of  New  York.  Mr. 
Bowers  was  president  of  the  City  and  the  Putnam,  both  of  Hartford,  and  thence 
moved  to  New  Haven.  T.  C.  AUyn  was  promoted  to  the  presidency.  Mr.  Coit  left 
to  represent  the  company  in  New  York  city,  and  later  became  assistant-manager  of 
the  Royal  of  Liverpool.  Mr.  Browne  resigned  to  take  the  presidency  of  the  Con- 
necticut Fire,  and  Mr.  Whiting  to  take  the  presidency  of  the  Orient. 

Christopher  C.  Lyman,  appointed  a  clerk  July  20,  1835,  and  assistant-secretary 
in  1840,  filled  the  place  till  June  i,  1878,  having  charge  of  the  bookkeeping  depart- 
ment. After  his  death  the  position  of  assistant-secretary'  remained  vacant  till  the 
appointment  of  Philander  C.  Royce,  June  23,  1881.  Mr.  Royce  was  born  of  New 
England  parentage  in  Plainfield,  111.,  in  1838;  graduated  at  Kno.x  College  in  i860; 
taught  till  1866,  when  he  entered  the  insurance  field,  first  as  local  and  later  as  special 
agent ;  served  in  the  western  department  of  the  Hartford  Fire  Insurance  Company, 
from  May,  1872,  till  August,  1876;  thence  as  secretary  of  the  Girard  Fire  and  Marine 
of  Philadelphia,  till  in  1881  he  returned  to  the  Hartford  Fire,  where  he  has  since 
remained,  having  been  made  secretary  in  1886. 

Thomas  Turnbull  succeeded  Mr.  Royce  as  assistant-secretary,  June  11,  1886. 
Born  in  Scotland  in  1834,  and  richly  endowed  with  the  sturdy  qualities  of  the  Scotch 
character,  he  came  to  America  in  1852,  and  engaged  in  the  wholesale  tea  trade  in 
Philadelphia  and  New  York.  He  was  special  agent  of  the  Niagara  Fire  from  1869 
till  1876,  when  he  became  general  agent  of  the  Hartford  Fire  in  New  York  state, 
holding  the  position  till  1886,  when  he  was  called,  as  above,  to  the  home  office. 

Charles  E.  Chase,  son  of  the  president,  born  at  Dubuque,  la.,  March  29,  1857, 
having  graduated  at  the  Hartford  High  School  in  1876,  the  next  year  entered  the 
service  of  the  company,  and  for  efficiency  was  made  second  assistant-secretary 
July  I,  1890. 

Cofran  &  Bissell  manage  the  western  department  from  Chicago,  H.  K.  Belden 
the  Pacific  department  from  San  Francisco,  and  Young  &  Hodges  the  Metropolitan 
department  from  New  York  city. 

On  the  first  of  Januan.',  1897,  the  gross  assets  of  the  company  were  ;Sio,oo4,- 
697.55,  and  the  net  surplus,  after  deducting  reserve  for  reinsurance  and  all  unsettled 
claims,  ;^3, 264,392. 15. 

The  small  capital  and  large  surplus  of  the  Hartford  give  it  an  enormous  advan- 
tage in  the  struggle  for  existence.  Income  from  assets  alone  suffices  to  pay  dividends 
that  ought  to  satisfy  the  most  exacting  shareholder.  All  the  profits  from  the 
business  in  seasons  of  general  prosperity  can,  if  needful,  be  added  to  the  reserves  to 
meet  the  drains  which  recur  at  irregular  intei-vals,  but  with  unerring  certainty. 

THE  NEW  HAVEN  FIRE  INSURANCE  COMPANY. 
The  New  Haven  Fire  Insurance  Company,  with  a  nominal  capital  of  g  100,000, 
was  incorporated  in  18 13.  Presidents  were  :  Isaac  Tomlinson,  1813;  Charles  Deni- 
son,  1818;  Simeon  Baldwin,  1820.  Secretaries:  John  H.  Lynde,  1813;  William 
Connor,  1818;  Roger  S.  Skinner,  1820.  In  1822  Samuel  Ward,  Har\-ey  Sanford 
and  L.  E.  Wales  were  appointed  a  committee  to  negotiate  a  contract  with  the  Hart- 
ford Fire  Insurance  Company  to  assume  its  outstanding  risks.  Mr.  Skinner,  the 
secretary,  was  also  agent  of  the  Hartford,  and  hence  acted  for  both  parties.     The 


22  INSURANCE   IN  CONNECTICUT. 

arrangement  was  completed  in  June,  the  Hartford  giving  a  bond  of  indemnity  in  the 
penal  sum  of  $150,000.  The  terms  of  the  contract  were  not  spread  on  the  record, 
but  the  penalty  of  the  bond  probably  equalled  the  entire  amount  at  risk,  since  the 
sum  paid  for  reinsurance  made  no  perceptible  addition  to  the  current  receipts  of  the 
Hartford.     The  charter  was  revoked  the  same  year. 

THE  MIDDLETOWN  FIRE  INSURANCE  COMPANY. 

The  Middletown  Fire  Insurance  Company  was  incorporated  in  May,  18 13,  with 
a  capital  of  $150,000,  to  be  paid  in  the  customary  way.  The  first  board  of  directors 
consisted  of  Elijah  Hubbard,  John  R.  Watkinson,  Samuel  Wetmore,  Joseph  W. 
Alsop,  Josiah  Williams,  Daniel  Rand,  and  Samuel  Gill. 

Elijah  Hubbard  was  elected  president,  and  Thomas  Hubbard,  secretary.  Jona- 
than Barnes,  Jr.,  soon  succeeded  Thomas  Hubbard.  The  company  ran  along  half  a 
dozen  years,  making  a  feeble  show  of  life,  and  then  passed  out  of  existence.  Its 
outstanding  risks  were  assumed,  September  25,  18 19,  by  the  ^tna  of  Hartford, 
which  executed  a  bond  in  the  penal  sum  of  $200,000  to  save  it  harmless. 


CHAPTER    III. 

/.V5  URANCE    IN    C  O NNE  CTICUT—  Continued. 
THE    ^TNA    INSURANCE    COMPANY   (hARTFORD). 

ALTER  MITCHELL,  first  secretary  and  factotum  of  the  Hartford  Fire, 
lived  in  Wetliersfield,  a  village  three  or  four  miles  south  of  the  city.  In 
the  early  days  every  resident  desiring  a  policy  had  to  seek  him,  and  at  hours 
to  suit  his  convenience.  The  road  over  a  clayey  soil  was  frequentl)-  so  bad 
that  the  trip  to  Wetliersfield  took  more  time  than  a  trip  to  Springfield  or  New 
Haven  does  now.  He  had  a  way  of  closing  his  office  at  three  or  four  o'clock  in  the 
afternoon,  and  on  Saturdays  much  earlier.  According  to  current  tradition  merchants, 
often  inconvenienced  by  the  daily  habits  of  Mr.  Mitchell,  resolved  to  flank  his 
position  by  forming  a  new  company.  Hence  originated  the  conception  of  the  .5Jtna. 
The  company  was  incorporated  in  May,  1819.  The  capital  was  placed  at  $150,- 
000,  with  the  privilege  of  increase  to  any  further  sum  not  exceeding  $500,000. 
Subscribers  were  required  to  pay  within  thirty  da)s  after  the  first  meeting  of  the 
corporation  five  per  cent.,  within  sixty  days  five  per  cent,  more,  and  the  remaining 
ninety  per  cent,  either  in  mortgages  on  real  estate,  or  indorsed  promissory  notes, 
approved  by  the  president  and  directors  and  payable  thirty  days  after  demand. 
Each  stockholder  was  entitled  to  one  vote  for  every  share  up  to  fifty,  and  there  his 
voting  power  came  abruptly  to  an  end.  While  both  corporate  and  personal  liability 
was  limited  to  the  investment,  it  was  with  the  reservation  that  "for  misconduct  or 
fraud,  the  person  guilty  thereof  shall  be  personally  liable  to  said  corporation,  or  to 
the  insured,  as  the  case  may  be." 

At  the  first  meeting  of  the  stockholders  held  June  15,  18 19,  at  Morgan's  Coffee 
House,  the  following  directors  were  chosen  :  Thomas  K.  Brace,  Thomas  Belden, 
vSamuel  Tudor,  Jr.,  Henry  Kilbourn,  Eliphalet  Averill,  Henry  Seymour,  Griffin 
Stedman,  Gaius  Lyman,  Judah  Bliss,  Caleb  Pond,  Nathaniel  Bimce,  Joseph  Morgan, 
Jeremiah  Brown,  James  M.  Goodwin,  Theodore  Pease,  Elisha  Dodd,  Charles  Babcock. 


INSURANCE   IN  CONNECTICUT.  23 

At  a  meeting  of  the  directors  the  same  day  Thomas  K.  Brace  was  chosen  presi- 
dent, and  Isaac  Perkins,  secretary.  They  voted  to  make  the  office  of  Mr.  Perkins 
the  office  of  the  company  also,  and  to  keep  its  acconnt  at  the  Plioenix  Bank.  By-laws 
were  adopted  June  25th.  These  provided  that  the  directors  should  be  divided  into 
four  classes,  taken  in  the  order  of  appointment,  each  to  be  on  duty  one  month,  fol- 
lowing in  rotation.  No  money  could  be  drawn  from  bank  except  on  checks  signed 
by  the  president  and  countersigned  by  the  secretary.  Directors  were  made  ex  officio 
surveyors  for  the  company. 

September  27,  18 19,  Mr.  Brace  resigned  the  presidency  in  consequence  of 
pecuniary  embarrassments,  when  Henry  Leavitt  Ellsworth,  who  had  already  been 
elected  a  director  in  the  place  of  Theodore  Pease,  deceased,  was  chosen  to  fill  the 
vacancy. 

How  modest  were  the  beginnings  of  this  great  institution,  appears  from  the 
balance  sheet  presenting  its  operations  up  to  May  31,  1820.  On  the  debit  side  the 
principal  item  is  the  dividend  of  six  per  cent.,  declared  December  15,  1819,  on 
the  actual  cash  investment,  making  $900.  From  the  organization  till  May  31,  1820, 
the  total  current  expenses,  including  ^225  for  the  salary  of  Mr.  Perkins  and  rent, 
reached  the  sum  of  ^451.82.  During  this  period  the  receipts  from  all  sources 
amounted  to  ^3,646.42,  and  as  no  losses  had  occurred,  the  fiscal  year  closed  with  a 
profit  balance  of  ;g2, 294.60. 

Mr.  Ellsworth  resigned  the  presidency  March  6,  1821,  when  Thomas  K. 
Brace,  real  father  of  the  enterprise,  whose  embarrassments  in  the  meantime  had  been 
removed,  was  re-elected. 

Son  of  Chief  Justice  Oliver,  and  twin  brother  of  Governor  William  W.,  Henry 
L.  Ellsworth  was  born  November  10,  1791  ;  graduated  at  Yale  in  1810  ;  studied  law, 
but  subordinated  professional  practice  to  more  active  pursuits  ;  erected  several  build- 
ings in  Hartford  on  Central  Row  ;  went  to  the  frontier  in  1 832  as  Indian  Commissioner 
to  the  tribes  in  the  southwest  beyond  Arkansas  ;  was  ten  years  at  the  head  of  the 
United  States  Patent  Office  in  Washington,  and  then  settled  at  Lafayette,  Indiana, 
as  United  States  Land  Commissioner.  He  moved  to  Fair  Haven,  Connecticut,  in 
1856,  and  died  there  December  27,  1S58.  By  will  he  left  the  bulk  of  a  large  estate 
to  Yale  College.     A  contest  over  the  document  ended  in  a  compromise. 

The  first  policy  for  S6000  was  issued  August  17,  18 19,  and  is  treasured  among 
the  choice  possessions  of  the  office.     About  a  month  later  the  ^tna  contracted  to 
assume  all  outstanding  risks  of  the  Middletown  Fire  Insurance  Company,  amounting  . 
as  it  seems  to  nearly  ^200,000.     This  is  the  first  case  of  re-insurance  of  a  company  in 
the  state,  and  is  believed  to  be  the  first  in  the  country. 

In  1822  the  board  undertook  to  perform  a  similar  act  of  grace  for  the  New  Haven 
Fire,  then  nearing  the  end,  but  Roger  S-  Skinner,  its  secretary,  was  also  agent  of  the 
Hartford  Fire,  and  diverted  the  contract  to  his  principal. 

Questions  discussed  and  passed  upon  at  early  meetings  of  the  directors  often 
appear  trivial,  but  none  the  less  instructive  because  trivial,  for  they  furnish  data  for 
measuring  the  length  of  the  road  from  crude,  tentative  beginnings  to  the  development 
of  a  highly  educated  profession.  Matters  of  detail  are  now  turned  over  to  the  experts, 
who  fill  the  executive  offices,  and  to  their  trained  assistants.  Then  the  vital  parts  of 
each  policy,  with  the  survey,  were  read  to  the  board  before  delivery.  Within  eight 
months  they  wisely  voted  to  take  no  new  risk  in  excess  of  ;g  10,000  without  a  unani- 
mous vote  in  its  favor,  and  in  such  cases  nine  were  required  to  constitute  a  quorum. 
The  next  year  an  agent  was  authorized  to  write,  not  exceeding  ^17,000  on  a  single 
risk,  and  it  is  specially  noted  that  nine  directors  were  present  and  favored  the  excep- 


24  INSURANCE   IN  CONNECTICUT. 

tion.  Evidently  the  original  division  into  four  classes  had  already  fallen  into  disuse. 
To  provide  mental  aliment  for  the  wisdom  that  gathered  around  the  table,  the  secre- 
tary was  requested  to  procure  for  the  use  of  the  ofhce,  two  newspapers,  either  semi- 
or  tri-weekly,  published  one  in  New  York  and  one  in  Boston,  also  a  gazetteer  and  a  big 
map.  As  a  first  essay  to  collect  statistics  the  secretary  was  requested  to  register,  in 
a  suitable  blank  book,  all  losses  by  fire  that  might  come  to  his  knowledge,  designa- 
ting place,  kind  of  property,  etc.,  and  for  the  service  a  reasonable  compensation  was 
promised  in  addition  to  salary.  Thus  the  outlay  for  newspapers,  aside  from  the  grat- 
ification of  habitues^  was  made  to  serve  a  permanent  utility.  Such  incidents  show 
the  care  bestowed  upon  minute  details  by  the  directors,  and  the  vigilance  with  which 
they  watched  the  expense  account. 

Until  the  formation  of  the  ^tna,  the  few  American  companies  in  existence 
restricted  their  efforts  almost  entirely  to  the  local  business  that  could  be  conveniently 
secured  by  the  executive  officers.  Very  early  the  .i5itna  initiated  a  radical  departure 
from  the  previous  method,  planting  agencies  cautiously  at  the  more  important  cen- 
tres of  trade,  and  gradually  extending  the  system  till  every  desirable  place  in  the 
country  was  occupied.  April  2,  1822,  the  directors,  by  vote,  requested  the  secretary 
"  to  journey  on  the  seaboard  of  Massachusetts,  New  Hampshire  and  Maine,  and  from 
thence  through  the  interior  of  the  country  home,  and  establish  agencies  at  all  places 
where  he  may  think  proper,  and  for  his  service  he  shall  be  allowed  his  expenses  and 
two  dollars  per  day."  During  the  trip  the  per  diem  allowance  took  the  place  of 
salary.  Again,  in  October,  1825,  the  president  and  secretary  were  authorized  to 
employ  a  suitable  person  to  travel  through  Pennsylvania,  Ohio,  Indiana,  Illinois. 
Missouri  and  the  states  south  for  the  purpose  of  establishing  agencies. 

A  destructive  fire,  bringing  heavy  losses  to  the  ^tna,  occurred  at  Mobile,  Ala., 
in  the  fall  of  1827.  Mr.  Perkins  was  sent  thither  in  November  to  settle  claims  and 
suspend  the  business  of  the  agency.  He  was  also  empowered  both  to  establish  and 
suspend  agencies  at  discretion  on  the  journe}'.  While  at  Mobile,  although  expected 
by  tlie  home  office  to  pay  by  sight  drafts,  he  invariably  drew  at  thirty  days.  The 
process  of  adjustment  proved  somewhat  tedious.  Local  business  had  been  unsatis- 
factory. Mr.  Perkins  felt  ill  at  ease,  nursing  exaggerated  notions  of  southern  care- 
lessness in  handling  pistols  and  other  implements  suited  to  make  life  unpleasant  for 
disagreeable  strangers.  He  wished  to  avoid  irritation  and  especialh"  any  outbreak  of 
resentment.  Hence,  as  he  explained  on  reaching  home,  he  intended  to  be  well  out 
of  the  way  of  harm  in  case  losses  elsewhere  prevented  the  company  from  meeting 
the  drafts  and  they  went  back  protested. 

The  country  was  passing  through  a  period  of  profound  distress.  One  of  the 
severest  panics  ever  known  struck  England  in  1825,  suddenly  ending  an  era  of  great 
apparent  prosperity  and  riotous  speculation. 

From  the  intimacy  of  the  business  connections  between  the  two  countries  our 
people,  though  in  much  sounder  condition,  were  sucked  into  the  whirlpool.  Fac- 
tories were  idle,  industries  disorganized,  trade  sluggish,  collections  poor  and  bank- 
ruptcies frequent.  Fires  in  1827,  as  measured  by  the  losses  of  insurance  companies, 
were  four-fold  in  excess  of  the  normal  ratio. 

Perils  so  thickened  around  the  -Etna  that  only  the  Roman  courage  of  the  direc- 
tors saved  it  from  destruction.  A  committee,  appointed  to  devise  ways  and  means  to 
pay  losses,  made  their  report  November  22,  1827,  and  recommended  that  the  bank 
stocks,  having  a  par  value  of  $21,750,  be  sold,  except  !Si,500  in  the  Eagle  Bank  of 
Providence;  that  all  loans,  amounting  to  $6,780,  be  collected  as  soon  as  it  could  be 
done  without  inconvenience  to  borrowers,  and  that  agents  be  pressed  to  remit  bal- 


INSURANCE   IN   CONNECTICUT.  25 

ances  on  hand.  From  the  three  sources  it  was  thought  that  $30,000  could  be  raised 
in  time  to  apply  on  outstanding  losses.  For  the  balance  needed  it  was  considered 
inexpedient  to  make  an  assessment  on  the  stock  notes.  Accordingly  they  further 
recommended  that  loans  be  made  at  one  or  more  of  the  city  banks  on  paper  endorsed 
b}-  some  of  the  directors,  and  that  the  board  pledge  themselves  to  save  the  endorsers 
harmless.     By  a  unanimous  vote  the  report  was  accepted  and  approved. 

Thus  the  first  dread  crisis  in  the  histor}'  of  the  .(Etna  was  faced.  From  time  to 
time  other  situations  not  less  appalling  have  confronted  the  management.  While 
the  constituent  members  have  changed,  the  spirit  animating  the  body  has  never 
changed.  Calamities  sweeping  away  its  assets  and  apparently  leaving  nothing  but  a 
shadow  bereft  of  substance,  have  again  and  again  been  met  with  the  same  indomit- 
able resolution  and  overcome. 

Owing  to  the  disorganized  condition  of  business,  the  moral  hazard  was  greatly 
increased.  The  ^F)tna  appointed  committees  to  confer  with  other  offices  which  were 
undergoing  like  experiences,  and,  by  mutual  agreements,  there  followed  before  the 
end  of  the  year  a  general  raising  of  rates.  Perhaps  to-day  this  course  would  be  stig- 
matized by  a  certain  class  of  writers  as  a  dangerous  combination,  but  it  saved  the 
lives  of  such  as  sur\'ived. 

After  paying  out  the  funds  derived  from  the  sale  of  stocks  and  the  collection  of 
loans,  the  conipan\'  pledged  to  various  banks  stock-notes  to  the  amount  of  $50,000  as 
security  for  loans.  Before  these  were  fully  paid  its  condition  had  so  improved  that 
in  June,  1830,  the  directors  voted  a  dividend  of  two  dollars  per  share. 

Isaac  Perkins  retired  in  June,  1828.  He  practiced  law  in  Hartford  from  1805 
till  1S40,  ser\'ing  for  two  j-ears  as  prosecuting  officer  for  the  county.  For  a  while  he 
was  in  partnership  with  Thomas  C.  Perkins,  who  became  one  of  the  most  eminent 
lawyers  in  the  state.  For  the  first  nine  years  the  business  of  the  company  was  trans- 
acted in  the  office  of  Mr.  Perkins.  His  salary  fluctuated,  rising  in  1823  ^"^  1824  to 
the  rate  of  $900  per  annum,  with  an  allowance  of  $100  additional  for  rent  and  fire- 
wood, and  afterwards  receding  to  $750.  In  lieu  of  salary  he  was  voted  four  dollars 
per  dav  while  absent  on  the  trip  to  Mobile,  whence  he  reached  home  about  the  mid- 
dle of  March,  1828. 

June  9,  1828,  James  M.  Goodwin  was  appointed  secretary,  and  ser\^ed  till  May  i, 
1837,  when  his  resignation  of  April  24th  took  effect.  June  8,  1837,  Simeon  L. 
Loomis,  who  for  .several  years  had  been  a  faithful  clerk  in  the  ofllice,  was  elected  in 
place  of  I\Ir.  Goodwin. 

Dividends  of  $1  per  share  were  paid  with  fair  regularity  from  June,  1831,  till 
December,  1834,  when  the  rate  was  increased  to  #5.  By  May,  1836,  the  situation 
had  so  improved  that  the  board  voted  a  dividend  of  twenty-five  per  cent,  to  be 
applied  on  the  stock-notes.  Meanwhile  the  investment  of  funds  was  resumed, 
including  a  subscription  for  three  hundred  shares  in  the  Hartford  and  New  Haven 
Railroad  in  the  year  1835. 

Fire  losses  serve  as  quite  an  accurate  gauge  of  general  business  conditions, 
rising  with  adversit}'  and  falling  with  prosperity.  The  panic  of  1837  brought 
trouble  to  insurance  offices,  causing  a  large  excess  of  outgo  over  income.  With  none 
of  them  was  there  a  surplus  seeking  securities.  To  meet  deficiences  most  were  com- 
pelled to  sell  or  borrow.  The  year  1839  opened  favorably,  but  the  panic  of  '37  had 
not  yet  spent  its  force.  During  the  summer  and  fall  heavy  losses,  occurring  for  the 
most  part  over  a  wide  area,  exhaustive  more  from  frequency  than  magnitude,  com- 
pelled the  company  to  resort  again  to  sales  and  loans. 

At  the  request  of  the  directors,  and  with  full  power  to  remove  and  appoint 


26  INSURANCE   IN  CONNECTICUT. 

agents,  settle  accounts,  collect  dues,  give  discharges,  and  act  otherwise  for  the  benefit 
of  the  company.  President  Brace,  in  the  summer  of  1838,  made  a  trip  through  New 
York,  New  Hampshire  and  the  British  dominions.  His  letters,  by  the  way, 
addressed  to  Simeon  L.  Eoomis,  secretary,  are  still  preserved  in  the  arcliives  of  the 
company.  The' journey,  which  would  now  require  a  week,  was  then  leisurely  per- 
formed between  the  middle  of  June  and  the  ist  of  September. 

The  .Etna  was  the  first  company  to  issue  a  fire  policy  in  Chicago,  having,  in 
1834,  appointed  Gurdon  S.  Hubbard  to  represent  it.  The  document  was  on  exhibi- 
tion in  the  historical  library  of  that  city  till  destroyed  in  the  fire  of  1871.  Mr.  Hubbard 
remained  a  trusted  agent  of  the  company  till  his  retirement,  after  more  than  thirty 
years  of  faithful  service. 

No  small  part  of  the  pioneer  work  was  performed  b}-  the  early  director,  who 
traveled  west  and  south  by  stage  and  boat,  long  in  advance  of  railways,  establishing 
outposts  at  frontier  towns  which  have  since  developed  into  populous  cities.  In  this 
way,  to  a  large  extent,  Cincinnati,  Detroit,  Chicago,  Louisville,  St.  Louis,  Memphis, 
Natchez,  New  Orleans,  Mobile,  and  other  places  were  reached,  and  the  territory 
partially  pre-empted.  He  went  armed  with  ample  powers,  his  instructions  following 
in  its  essential  features  the  commission  given  to  Mr.  Brace  in  1838.  In  case  of  large 
fires  the  work  now  performed  by  the  professional  adjuster  then  fell  to  the  director. 
As  emergencies  arose  different  members  of  the  board  were  selected  for  special  services 
at  points  near  and  far.  Some  became  very  expert  in  discriminating  just  from  unjust 
claims,  and  in  effecting  settlements  with  all  sorts  and  conditions  of  men. 

During  the  period  of  infancy,  while  the  company  was  fighting  for  existence,  the 
economical  scale  of  expenditures  arranged  for  Secretary  Perkins  on  his  initiatory 
trip  through  New  England  was  rigorously  adhered  to.  Just  twenty  years  later,  in 
1S42,  Joseph  Morgan,  one  of  the  original  directors,  made  an  extensive  circuit,  taking 
in  New  Orleans  and  Chicago,  and  all  the  important  intermediate  towns.  The  jour- 
ney, estimated  at  six  thousand  one  hundred  and  four  miles,  occupied  ten  weeks,  at  an 
average  expense,  including  fares  and  hotel  bills,  of  ^83.29  per  day.  During  most  of 
his  long  life  Mr.  Morgan  kept  a  diary.  The  record,  filling  many  volumes,  is  now  in 
possession  of  his  grandson,  James  J.  Goodwin.  Chicago  then  had  four  or  five  thou- 
sand inhabitants.  St.  Louis  was  six  times  as  large.  A  notable  incident  of  the  trip 
was  a  detour  to  Ashland  to  visit  Henry  Clay.  Mr.  Morgan  was  called  on  oftener 
than  either  of  his  associates  to  do  this  kind  of  work.  He  was  the  father  of  Junius 
S.  Morgan,  the  eminent  London  banker,  and  grandfather  of  J.  Pierpont  Morgan, 
whose  more  than  royal  power  in  financial  circles  has  been  used  effectively  to  purify 
American  railway  management,  and  to  rehabilitate  great  properties  wrecked  by 
incompetence  and  fraud.  Three  generations  have  been  successively  represented  in 
the  directoiy  by  Joseph,  Junius  S-  and  J.  Pierpont  Morgan.  Mrs.  James  Goodwin, 
of  Hartford,  was  a  daughter.  His  descendants,  both  those  who  have  remained  at 
home  and  those  who  have  found  elsewhere  broader  fields,  have  bestowed  upon  the 
city  munificent  gifts,  including  nearly  $300,000  for  a  free  library  and  art  gallery. 

By  an  amendment  to  the  charter  secured  in  1839,  the  company  was  empowered 
to  issue  policies  against  the  hazards  of  inland  navigation.  The  privilege  was  not 
exercised  till  the  autumn  of  1843,  when  the  directors  authorized  agents  at  Apalachi- 
cola.  Savannah,  Macon,  Columbus,  Mobile,  New  Orleans,  Natchez  and  Louisville,  to 
take  risks  on  cargoes  on  board  of  steamers  and  pole  boats,  but  not  on  the  boats 
themselves,  nor  on  the  cargoes  loaded  on  "that  species  of  craft  called  boxes,  arks  or 
broad-horns."  A  policy  issued  October  4,  1859,  at  the  rate  of  one-half  per  cent.,  on 
fifteen  negroes,  valued  at  ;g  16,000,  bound  from  Glasgow,  Mo.,  to  Carrollton,  Miss.,  is 
still  preserved  at  tlie  home  office  as  a  curiosity  of  inland  insurance. 


INSURANCE   IN  CONNECTICUT.  27 

Affairs  had  so  improved  that  in  November,  1 843,  the  board  declared  a  dividend 
of  18  per  cent. — eight  in  cash,  and  ten  to  be  indorsed  on  the  stock-notes. 

The  .Btna  escaped  the  fire  of  December  16,  1H35,  in  New  York  city — the  first  in 
the  series  of  great  American  conflagrations — which  destroyed  property  to  the  value 
of  ;g  15,000,000,  and  bankrupted  twenty-three  out  of  twenty-six  local  insurance  com- 
panies. It  entered  the  city  the  following  year,  having  for  agent  Augustus  G.  Haz- 
ard, afterwards  the  organizer  and  president  of  the  Hazard  Powder  Company,  of 
Enfield.  It  was  not  so  fortunate  in  the  fire  of  1845,  which  swept  ^6,000,000  of 
property  from  the  business  centre  of  the  metropolis,  and  cost  the  ^?itna  5115,000. 
When  the  news  reached  Hartford,  Mr.  Brace  called  together  the  directors  and  told 
them  that  the  calamity  would  probably  exhaust  the  entire  resources  of  the  company. 
Going  to  the  fire-proof,  he  took  out  and  laid  on  the  table  the  stocks  and  bonds 
representing  its  investments.  Little  was  said,  each  member  waiting  for  some  one 
else  to  take  the  initiative.  At  length  the  silence  was  broken  by  the  question  :  "  Mr. 
Brace,  what  will  you  do?" 

"Do?"  replied  he.  "Go  to  New  York  and  pay  the  losses  if  it  takes  every  dollar 
there,"  pointing  to  the  packages,  "and  my  own  fortune  besides." 

"Good,  good,"  responded  the  others.  "We  will  stand  by  -s-on  with  our  fortunes 
also." 

Such  an  increase  of  premium-receipts  followed,  that  in  twelve  months  the  yEtna 
was  as  strong  in  cash  as  before.  In  March,  1848,  a  dividend  of  twenty  dollars  a 
share,  amounting  to  $50,000,  was  indorsed  on  the  stock-notes,  and  the  money  invested 
in  solid  securities,  some  of  which  the  company  still  holds.  Hitherto,  it  had  been 
forced  again  and  again  to  part  with  favorite  investments  to  pay  losses,  but  here  when 
about  to  enter  upon  the  last  half  of  the  century-,  the  somewhat  periodical  distresses 
due  to  smallness  of  resources  passed  away  for  good.  In  February,  1849,  the  board 
declared  a  dividend  of  twenty  per  cent.,  applicable  only  to  the  payment  of  the  third 
and  last  installment  upon  the  stock  notes.  By  this  operation  these  were  finally 
extinguished. 

Fifty  thousand  dollars  were  added  to  the  original  capital  in  December,  1822. 
The  secretary  was  authorized  to  offer  the  new  stock  at  an  advance  of  $5.00  on  a 
share,  wot  pro  rata  to  holders  of  record,  but  "in  such  number  of  shares  and  to  such 
persons  as  in  his  opinion  may  be  most  for  the  interest  of  the  company." 

In  1S46,  in  conformity  with  a  vote  passed  the  30th  of  the  previous  December, 
$50,000  were  added,  one-half  payable  in  cash  or  its  equivalent,  and  one-half  in  the 
customary  installment  notes.  In  July,  1849,  a  third  increase  of  $50,000  was  voted, 
to  be  paid  in  cash  or  indorsed  notes,  running  not  more  than  eighteen  months.  Thus 
the  company  turned  the  middle  of  the  century  with  a  fully  paid  capital  of  $300,000. 

January  i,  1849,  the  ^Etna  owned  bonds  and  stocks  valued  at  $269,550.  Thir- 
teen months  later,  with  $50,000  of  fresh  capital  in  the  treasury-,  its  assets  amounted 
to  $456, 327.46,  and  its  liability  for  losses  to  $141,344.  In  the  interim  it  disbursed 
g;i25,ooo  for  a  single  fire  in  St.  Louis. 

But  the  season  of  storms  which  culminated  at  St.  Louis,  and  sent  many  com- 
petitors to  the  bottom,  convinced  the  public  of  the  inherent  staunchness  of  the 
.(Etna,  and  by  the  prudent  enterprise  of  its  managers,  even  cruel  reverses  to  the 
general  interests  of  fire  insurance,  were  made  to  bring  to  it  large  accessions  of  busi- 
ness and  revenue. 

The  Protection,  the  third  fire  insurance  company  organized  at  Hartford,  failed  in 
1854  through  the  continuous  unprofitableness  of  its  marine  department,  aggravated 
bv  the  incurable  injuries  received  at  St.  Louis  in  1849.     It  had  been  the  pioneer  in 


28  INSURANCE   IN  CONNECTICUT. 

occupying  the  small  as  well  as  tlie  large  towns  of  the  West,  bnt  the  gains  from  these 
sources  were  insufficient  to  offset  the  losses  incurred  at  sea  and  on  our  inland  waters. 
Here  was  a  broad  gap  to  be  filled,  and  the  ^tna  lost  no  time  in  meeting  the  emer- 
gency, for  it  opened  a  branch  office  at  Cincinnati  in  1853  with  the  firm  purpose  of 
keeping  step  with  civilization  in  progressive  occupancy  of  the  West.  When  a  few 
months  later  the  Protection  yielded  up  the  ghost  a  material  share  of  the  business 
dropped  as  ripened  fruit  into  the  lap  of  its  rival.  Soon  a  thousand  agents  were  at 
work  west  of  the  Alleghenies,  and  in  the  ensuing  period  of  exemption  frou:  large 
fires  the  company  rolled  upwealth  with  a  rapidity  never  equalled  before  either  in  the 
United  States  or  elsewhere.  In  1854  the  capital  was  increased  from  ^300,000  to 
;^ 500, 000,  one-half  contributed  by  shareholders  and  the  other  half  by  a  dividend  from 
profits.  The  figures  remained  at  this  point  but  a  short  time,  for  in  1857  they  were 
changed  to  an  even  million.  In  1859,  from  the  profits  of  two  years,  the  owners  were 
gladdened  by  a  second  stock  dividend  of  half  a  million,  which  was  followed  in  1864 
by  another  for  ^750,000.  Evidently  the  figures,  ;g2,25o,ooo,  offended  the  eyes  of  the 
directors,  and  accordingly  after  enduring  the  sight  for  two  short  years  they  raised  the 
capitalization  in  1866  by  a  stock  dividend  to  the  rounded,  symmetrical  and  artistic 
sum  of  $3,000,000.  Ambition  to  make  the  ^tna  the  largest  fire  insurance  company 
in  the  country  led  the  stockholders  in  i88r  by  an  issue  of  ten  thousand  new  shares  at 
par  for  cash  to  enlarge  the  capital  to  four  millions,  wliere  it  now  stands. 

In  185 1  the  company  appointed  its  first  traveling  or  special  agent,  A.  F.  Will- 
riiarth,  who  a  few  months  later  was  made  assistant  secretary,  but  soon  left.  The 
position  of  assistant  secretary,  evidently  created  for  Mr.  Willmarth,  remained  vacant 
except  during  the  brief  incumbency  of  Jonathan  Goodwin,  Jr.,  appointed  in  1863, 
till  1867,  when  it  was  permanently  revived  on  the  accession  of  William  B.  Clark  to 
the  official  corps. 

Thomas  Kimberly  Brace,  through  whose  influence  and  exertions  mainly  the 
^tna  was  brought  into  existence,  warned  by  the  infirmities  of  age,  resigned  the 
presidency  in  1857,  and  died  June  14,  i860,  in  his  eighty-first  year.  Stephen  Brace 
(Bracey),  the  emigrant  ancestor,  came  from  London  and  settled  in  Hartford.  His 
grandson,  lyientenant  Jonathan,  moved  to  Harwinton  in  1733;  Jonathan,  Jr.,  born  in 
Harwinton,  November  12,  1754,  graduated  at  Yale  College  in  1779,  studied  law,  ac- 
quired a  large  practice  in  Central  Vermont,  but  returned  to  Connecticut,  and  after 
residing  a  while  in  Glastonbury  took  up  his  permanent  abode  in  Hartford  in  1794. 
He  was  in  public  life  forty-two  years,  less  from  choice  than  from  solicitation  of  his 
fellow-citizens. 

Thomas  K.  Brace  was  born  October  16,  1779,  graduated  at  Yale  College  in  1801, 
and  settling  in  Hartford  built  up  the  wholesale  grocery  house  of  T.  K.  Brace  &  Co. 
He  was  mayor  of  the  city,  1840-43,  and  in  the  latter  year  consented  to  run  for  Con- 
gress on  the  Whig  ticket,  but  was  beaten  by  Col.  Thomas  H.  Seymour.  He  was 
nominated  for  a  subsequent  term,  but  declined  in  favor  of  James  Dixon,  who  was 
elected.  Mr.  Brace  belonged  to  the  safe  and  trusty  order  of  men  to  whom  others 
instinctively  turn  for  guidance. 

Edwin  G.  Ripley  succeeded  Mr.  Brace  August  4,  1857.  A  New  Hampshire  boy, 
Mr.  Ripley  emigrated  to  Hartford,  where  he  learned  the  details  of  business  in  the 
establishment  of  T.  K.  Brace  &  Co.  Later  he  became  partner  of  his  uncle,  Philip 
Ripley,  in  the  iron  trade.  He  was  elected  secretary  of  the  ^tna  in  June,  1853,  and 
vice-president  a  year  later.  He  died  August  26,  1862.  Quiet  but  forceful,  his  words 
were  few,  direct  and  convincing.  He  was  one  of  the  first  to  see  the  need  of  storing 
up  reserves  wherewith  to  meet  the  heavy  drains  of  hard  times,  and  to  open  book 


FORMER  PRESIDENTS  /ETNA  INSURANCE  COMPANY. 


INSURANCE   IN  CONNECTICUT.  29 

accounts  with  different  classes  of  risks  witli  a  view  to  learn   the  average  cost  of 
carrying  each. 

On  the  loth  of  September  following  Thomas  A.  Alexander  was  elected  president 
and  held  the  position  till  his  death,  March  29,  1866,  although,  broken  in  health  by 
continuous  labor,  he  had  resigned  the  previous  October.  Mr.  Alexander  entered  the 
service  of  the  ^tna  as  a  clerk  in  its  New  York  agency  in  March,  1843.  Upon  the 
resignation  of  A.  G.  Hazard  in  July,  1845,  he  was  promoted  to  fill  the  vacancy.  He 
moved  to  Hartford  in  November,  1853,10  take  the  secretaryship  of  the  company. 
Having  nearly  reached  the  term  of  three-score  years  and  ten  he  died  at  Bergen,  N. 
J.,  greatly  respected  and  lamented. 

In  April,  1S52,  Chillicothe,  O.,  called  for  $1  i5,cx)0,  and  three  months  later  Mon- 
treal took  $105,000.  For  the  next  ten  years  the  company  enjoyed  remarkable  im- 
munity from  large  losses,  considering  the  extent  and  magnitude  of  its  business. 
With  the  turn  of  the  tide  even  the  $163,000  required  to  settle  the  Portland  claims  in 
July,  1866,  and  the  $120,000  sent  to  Vicksburg  in  January-,  1867,  did  not  perceptibly 
interrupt  the  upward  flow  of  assets. 

Strangely  enough  the  phenomenal  prosperity  of  the  company  provoked  internal 
dissensions  in  regard  to  the  disposition  of  profits.  A  party  among  the  stockholders, 
strong  in  number  and  influence,  strenuously  resisted  the  policy  of  accumulating  a  re- 
insurance fund.  Any  deviation  from  the  early  practice  of  treating  a  premium  as 
fully  earned  the  instant  it  reached  the  treasury,  was  denounced  as  a  "new-fangled" 
notion  without  justification  in  theory  or  fact.  They  demanded  a  distribution  of  all 
earnings  either  in  cash  or  in  new  shares  which  the  recipient  could  convert  into  cash. 
Reserves  for  reinsurance  were  not  then  required  by  law.  Warned  by  the  practices 
and  consequent  failure  of  the  Protection,  the  managers  of  the  .Ijtna,  long  in  advance 
of  legislative  action,  saw  the  fallacy  of  the  reasoning  and  the  danger  of  the  method. 
They  urged  that  over  and  above  the  capital  an  insurance  company  should  have  a 
fund  large  enough  to  reinsure  outstanding  risks.  This  view  is  now  universally  en- 
forced by  law  and  has  become  a  truism  of  the  trade,  but  early  advocacy  of  the  doc- 
trine raised  a  tempest  around  the  officers  of  the  ^Etna.  Fortunately  they  were  sup- 
ported by  the  dominant  directors  and  won  the  fight.  The  decision  of  that  contro- 
versy plaved  a  large  part  in  giving  to  Hartford  its  pre-eminence  in  underwriting. 

A  dealer,  struck  by  the  frequency  of  fires  among  his  customers,  asked  Mr.  Ripley 
if  the  company  made  money  on  paper-mills.  He  could  not  answer  the  question,  but 
like  Paul  on  the  road  to  Damascus,  saw  a  bright  light.  Several  years  in  advance  of 
competitors  he  began  to  arrange  statistics  in  regard  to  relative  hazards,  and  the  task 
has  been  extended  to  cover  ever>'  kind  of  risk.  Upon  the  fulness  and  accuracy  of 
the  record  must  rest  the  claims  of  underwriting  to  a  scientific  basis,  including  the 
fairness  with  which  the  burden  of  losses  is  distributed  by  means  of  a  justly  gradu- 
ated scale  of  premiums. 

In  1853  the  general  agent  of  the  .^tna  at  Cincinnati  prepared  the  first  blank 
proof  of  loss.     In  substantially  the  original  form  it  has  since  come  into  universal  use. 

Not  content  with  furnishing  indemnity  to  an  ever-widening  circle  of  patrons, 
the  ^tna  initiated  the  work  of  educating  the  public  in  art  by  publishing  the  first 
chromo  poster  in  1855.  The  picture  represented  a  steamer  throwing  a  stream  of 
water  upon  a  burning  block.  How  deep  in  human  nature  lay  the  hitherto  dormant 
and  unconscious  appetite  destined  to  be  roused  by  the  venture  into  omnivorous  vo- 
racity, was  quickly  disclosed  through  the  abundance  of  aliment  supplied  tor  its  grat- 
ification. 

The  company  was  the  first  to  introduce  the  use  of  outline  charts  in  1857.      Out 


30  INSURANCE   IN   CONNECTICUT. 

of  this  germ  grew  the  Sanborn  maps,  now  an  essential  part  of  the  equipment  of  all 
large  offices. 

As  far  back  as  September,  1819,  the  ^?itna  issued  a  book  of  instructions  for  the  use 
of  its  agents.  It  classifies  risks,  fixing  the  rate  for  each  and  excluding  some  as  non- 
insurable.  It  insists  upon  correct  surveys  as  serving  to  expose  frauds,  prevent  law- 
suits, and  secure  truthfulness.  Buildings  and  fixtures  must  not  be  estimated  above 
their  worth  in  cash,  and  any  proposal  for  more  is  of  itself  a  cause  of  suspicion.  The 
rule  is  not  to  be  enforced  against  personal  property-,  merchandise,  etc.,  which  is  liable 
to  vary  in  kind  and  quantity.  The  insured  is  entitled  to  no  more  than  the  value  of 
the  property  proved  to  have  been  destroyed.  The  correctness  of  the  rules  laid  down 
in  this  little  book — believed  to  be  the  oldest  of  the  kind  iu  the  country — has  never 
been  successfully  assailed,  though  attempts  have  been  made  through  valued  policy 
laws  and  other  schemes  for  the  encouragement  of  robbery. 

In  April,  1866,  Lucius  J.  Hendee  was  elected  president  and  Jotham  Goodnow, 
secretan,'.     November  20,  1867,  William  B.  Clark  was  appointed  assistant  secretary. 

In  1S35  the  company  bought  of  William  H.  Imlay,  for  $9,570,  a  lot  on  the  north 
side  of  State  street,  and  proceeded  to  erect  the  block  now  containing  three  stores, 
numbered  134-42.  For  its  oflice  it  occupied  No.  134  till  the  completion,  in  1867,  of 
its  present  home  in  the  brown-stone  building  on  Main  street. 

By  the  Chicago  fire  of  1871  the  .?5tna  lost  $3,782,000.  To  meet  the  impairment 
the  capital  was  reduced  one-half,  and  immediately  refilled  by  cash  payments  of 
51,500,000.  Thirteen  months  afterward  the  Boston  fire  absorbed  $1,635,067  more, 
and  the  inroad  was  made  good  by  a  further  contribution  of  $1,000,000  from  the 
shareholders,  making  $2,500,000  furnished  by  them  in  a  year  to  maintain  the  tech- 
nical solvency  of  the  company.  After  deductiug  the  losses  at  Chicago,  over  $2,600,- 
000  of  assets  were  left  in  the  treasury  exclusive  of  fresh  contributions. 

Mr.  Hendee  passed  away  September  4,  1888,  aged  seventy.  He  was  born  in 
Andover,  Conn.,  July  13,  18 18.  He  assisted  his  uncle,  Abner  Hendee,  in  his  store  in 
Hebron,  from  1836  till  1852,  when  he  succeeded  to  the  business.  Both  uncle  and 
nephew  were  faithful  and  trusted  agents  of  the  ^tna.  While  living  in  Hebron 
Lucius  J.  took  deep  interest  in  the  political  controversies  that  led  up  to  the  war, 
serving  as  State  Senator  in  1856,  and  as  vState  Treasurer  three  terms,  1858-61.  July 
3,  1861,  he  was  elected  secretary  of  the  ^tna,  and  in  April,  1S66,  president,  in  both 
cases  succeeding  Mr.  Alexander.  Under  his  administration  the  great  reverses  at 
Chicago  and  Boston  were  met.  After  paying  nearly  $5,500,000  to  the  sufferers  from 
those  two  fires  alone,  the  company  came  out  of  the  ordeal  stauncher  and  with  higher 
credit  than  ever  before.  Sincere  and  upright,  genial  and  gentle,  Mr.  Hendee  was 
beloved  by  his  associates  both  in  office  and  out. 

September  26,  1888,  Jotham  Goodnow  was  elected  president ;  William  B.  Clark, 
vice-president ;  Captain  Andrew  C.  Bayne,  secretary  ;  and  James  F.  Dudley  and  Wil- 
liam H.  King,  assistant-secretaries. 

Mr.  Goodnow  died  suddenly,  November  19,  1892,  at  the  age  of  seventy-one.  He 
came  from  Fall  River  to  Hartford  in  1856,  was  bookkeeper  in  the  Hartford  Bank  till 
1864,  when  he  went  to  Rockville  as  cashier  of  the  First  National  Bank.  Soon  after 
he  accepted  the  cashiership  of  the  City  Bank  of  New  Haven,  and  iu  1866  the  secre- 
tar\'ship  of  the  yEtna.  His  most  impressive  characteristic  was  unswerving  devotion 
to  what  he  believed  to  be  right.  He  detested  evil-doing  and  fraud  imder  all  forms 
and  guises.  Love  of  right  sometimes  made  him  appear  unduly  iutolerant  of  wrong. 
He  served  in  the  common  council,  not  because  the  position  was  agreeable,  but  from 
a  desire  to  promote  the  public  welfare.  The  positions  he  held  best  indicate  the  esti- 
mate placed  by  others  ui50ti  his  capacity. 


V\ce 


pjes>' 


,dei«- 


WM.  B.  CLARK, 
Presid(.nt. 


Ailis^::\"^'is 


Stan,  ,s, 


'•^■^'eia 


THE  .-ETNA  INSURANCE  COMPANY  OF  HARTFORD. 


INSURANCE   IN   CONNECTICUT.  31 

Erastus  J.  Bassett,  adjuster  for  the  yEtna  since  1862,  and  widely  known  for  lii'^ 
skill  in  the  profession,  died  July  27,  1891,  at  the  age  of  seventy-one.  Andrew  C. 
Bayne  followed,  October  12,  1S93.  Although  born  in  Scotland,  he  entered  the  mili- 
tary service  of  the  United  States  at  the  outbreak  of  the  Civil  War,  and  was  wounded 
five  times,  thrice  seriously.  He  entered  the  regular  army  in  1866,  and  was  retired 
in '71.  Before  his  call  to  the  home  office,  he  had  served  the  com ])any  as  special 
agent,  with  headquarters  at  Albany. 

November  30,  1892,  William  B.  Clark  was  elected  president;  and,  December  7th, 
A.  C.  Bayne,  vice-president ;  James  F.  Dudley,  secretary  ;  and  William  H.  King  and 

E.  O.  Weeks,  assistant-secretaries. 

The  death  of  Captain  Bayne  brought  further  changes  in  the  official  corps.    James 

F.  Dudley  became  vice-president  ;  William  H.  King,  secretary  ;  and  E.  O.  Weeks 
and  F.  W.  Jenness,  assistant-secretaries.  All  these  gentlemen  are  veterans  in  the 
service  of  the  company.  Setli  King,  father  of  William  H. ,  was  enrolled  in  1838, 
and  for  ten  years  did  all  the  clerical  work  in  the  office.  His  son  followed  in  1862, 
and  his  grandson,  F.  E.  King,  in  1893. 

President  Clark  was  born  in  Hartford,  June  29,  1S41.  His  father,  A.  N.  Clark, 
was  manager  and  part-owner  of  the  Conrant  during  and  after  the  war.  The  son, 
after  serving  a  short  time  on  the  newspaper,  in  1857  entered  the  office  of  the  Phoenix 
Fire,  of  which  he  became  secretary  in  1863.  In  1867  he  resigned  to  take  the  assis- 
tant-secretaryship of  the  yEtna.  On  the  death  of  Mr.  Goodnow,  the  office  of  vice- 
president,  created  in  1853  for  Edwin  G.  Ripley,  and  after  his  promotion  allowed  to 
remain  vacant,  except  when  filled  for  a  brief  interval  in  1862-3  by  Henry  Z.  Pratt, 
was  revived  for  Mr.  Clark.  Although  still  in  the  prime  of  life,  in  term  of  service  he 
is  the  oldest  insurance  official  in  the  city,  and  even  from  early  manhood  has  been 
through  the  country  recognized  as  one  of  the  most  competent  men  in  the  profession. 
He  has  served  as  an  alderman,  and  on  the  board  of  water  commissioners,  and  as  a 
director  is  connected  with  several  financial  and  benevolent  institutions  of  the  cit\-. 

James  F.  Dudley,  vice-president,  was  born  in  Hampden,  Me.,  February  i,  1841, 
graduated  at  Bowdoin  College,  taught  awhile,  for  several  years  conducted  a  local 
insurance  office  at  Bangor,  Me. ;  in  1874  became  special  agent  for  Pennsylvania  for 
the  North  British  and  Mercantile  Insurance  Company,  in  1876  took  the  special  agency 
for  the  ^'na  for  the  same  territory,  and  later  for  New  York  ;  in  1885  returned  to  the 
North  British,  acting  as  assistant  manager  in  New  York  city  when  recalled  to  the 
^tnain  1888. 

William  H.  King,  secretary,  both  by  inheritance  and  a.ssociation,  seems  to  be 
almost  an  integral  part  of  the  .F^tna.  His  father  was  connected  with  the  company 
over  forty-four  years.  William  H.,  born  July  4,  1840,  after  a  short  term  of  service 
during  the  war,  entered  the  office  of  the  .^tna  in  1862,  becoming  second  assistant 
secretary  in  1888,  first  assistant  secretary  in  1892,  and  secretary  in  1893.  Declining 
attractive  offers  to  go  elsewhere,  he  has  remained  steadfast  in  attachment  to  the 
institution  to  which  his  life-work  has  been  devoted. 

Egbert  O.  Weeks,  assistant  secretary,  was  born  of  New  England  parentage  in 
Pennsylvania,  October  28,  1847.  Beginning  his  work  in  insurance  with  the  Wyom- 
ing Company  of  Wilkes-Barre,  Pa.,  he  later  became  special  agent  of  the  Lancashire, 
and  of  the  Liverpool  and  London  and  Globe.  In  iMay,  1 883,  he  entered  the  service  of 
the  ^■Etna  with  office  at  Wilkes-Barre.  In  1889  he  moved  to  Philadelphia,  taking 
supervision  of  Pennsylvania,  Delaware,  Maryland,  West  \'irginia  and  the  District  ot 
Columbia.  He  was  one  of  the  founders  of  the  Underwriters'  Association  of  the 
middle  department,  serving  almost  continuously  upon  its  Executive  Committee,  and 
as  president  one  term.     He  was  called  to  the  home  office  in  December,  1892. 


32  INSURANCE   IN    CONNECTICUT. 

F.  C.  Bennett,  of  Cincinnati,  is  general  agent  of  the  western  branch  ;  William 
H.  Wyman,  of  Omaha,  of  the  northwestern  ;  Boardman  &  Spencer,  of  San  Francisco, 
of  the  Pacific. 

January  i,  1897,  the  ^F^tna  had  gross  assets  of  gn, 431, 184.21.  After  provid- 
ing for  all  liabilities,  actual  and  contingent,  its  capital  of  $4,000,000  is  reinforced 
by  a  net  surplus  of  $3,849,988.05. 

THE  PROTECTION  INSURANCE  COMPANY. 

Of  all  the  early  insurance  companies  of  Connecticut,  none  began  under  such 
favorable  conditions  as  the  Protection,  of  Hartford.  It  was  incorporated  in  1825. 
The  capital  was  to  be  not  less  than  ^150,000,  with  the  privilege  of  increase  at 
pleasure  to  any  further  sum  not  exceeding  $500,000.  Ten  per  cent,  was  required 
at  the  time  of  subscription,  and  the  remaining  ninety  per  cent,  within  thirty  days 
was  to  be  paid  in  notes  secured  by  mortgage  on  real  estate,  or  by  approved  indorse- 
ments and  payable  thirty  days  after  demand.  Each  stockholder  was  entitled  to  one 
vote  for  every  share  up  to  one  hundred,  and  at  that  limit  his  voting  power  ceased. 
The  corporation  was  authorized  to  make  both  marine  and  fire  insurance.  By  an 
amendment  passed  the  next  year  the  clause  authorizing  marine  insurance  was  extended 
to  the  hazards  of  inland  navigation.  All  stockholders  in  the  Hartford  Insurance 
Company  had  the  special  privilege  of  taking  as  many  shares  in  the  Protection  as  they 
held  in  the  Hartford,  provided  the  privilege  was  exercised  at  the  opening  of  the 
books  in  June,  1825.  The  old  company  was  forbidden  to  make  any  further  insurance 
from  the  time  when  its  successor  went  into  operation. 

It  will  be  seen  that  in  direct  line  of  descent  the  Protection  inherited  the  tradi- 
tions and  good  will  of  the  first  generation  of  underwriters  in  Hartford.  Back  in 
1795,  Jeremiah  Wadsworth,  John  Caldwell,  Sanford  and  Wadsworth,  Elias  Shipman 
and  John  Morgan  formed  a  copartnership  "for  the  purpose  of  underwriting  on 
vessels,  stock,  merchandise,  etc.,  by  the  firm  of  the  Hartford  and  New  Haven 
Insurance  Company."  The  year  before  some  of  the  same  parties,  and  probably  all 
of  them  except  Shipman,  issued  policies  as  the  Hartford  Fire  Insurance  Company. 
The  combination  did  not  last  long.  Having  acquired  an  appetite  for  the  business, 
Shipman  organized  a  corporation  under  his  own  management  at  New  Haven  in 
1797.  The  partnership  of  Sanford  and  Wadsworth  was  dissolved  in  January,  1798, 
and  soon  afterwards  Sanford  moved  from  the  city.  Beginning  in  1799  with  Ezekiel 
Williams  as  manager,  John  Caldwell  and  John  Morgan,  in  association  with  others 
issued  himdreds  of  marine  policies,  till,  in  1803-4,  the  business  was  taken  up  by 
the  Hartford  Insurance  Company,  which,  in  turn,  was  merged  in  the  Protection  in 
1825,  the  last  secretary  of  the  Hartford  becoming  its  first  president. 

Books  for  subscription  were  opened  June  13,  1825,  at  the  oflice  of  the  Hartford 
Insurance  Company.  The  shares  were  quickly  taken,  and  on  the  22d  of  the  same 
month  the  stockholders  elected  the  following  board  of  directors :  Solomon  Porter, 
Jeremiah  Brown,  William  W.  Ellsworth,  Merick  W.  Chapin,  James  B.  Hosmer, 
Nathan  Morgan,  Henry  Hudson,  Roderick  Terry,  Edward  Watkinson,  James  H. 
Wells  and  Charles  S.  Phelps.  On  the  same  day  the  board  elected  William  Woicott 
Ellsworth  president,  and  Thomas.  Clap  Perkins,  secretary. 

William  W.,  son  of  Chief  Justice  Oliver  Ellsworth,  was  born  November  10, 
1791  ;  graduated  at  Yale  College  in  1810;  studied  law;  was  elected  three  times  to 
Congress,  but  resigned  before  the  close  of  his  third  term  ;  beginning  in  1838,  was 
four  times  elected  governor  of  Connecticut,  and  later  judge  of  the  Supreme  Court 
and  of  the  Supreme  Court  of  Errors,  where  he  served  till  retired  by  law,  at  the  age  of 
seventy.     He  died  January  15,  1868. 


INSURANCE   IN   CONNECTICUT.  33 

Tliomas  Clap  Perkins,  secretary  till  1S37,  was  born  at  Hartford,  July  30,  1798; 
graduated  at  Yale  College  in  1818,  standing  second  in  his  class,  and  practiced  law  in 
Hartford,  where  he  rose  to  such  eminence  that  he  was  employed  on  one  side  or  the 
other  of  nearly  even,-  important  case  that  came  before  the  courts.  He  declined  an 
appointment  to  the  bench  of  the  vSupreme  Court  of  the  state,  preferring  private  prac- 
tice to  judicial  honors.     He  died  October  11,  1870. 

Fortunate  in  lineage  and  its  first  executive  officers,  the  company  was  equally 
fortunate  in  meeting  the  man  who  built  up  its  agency  system  at  the  West.  Ephraim 
Robins,  a  merchant,  well  educated,  tall  and  attractive  in  person,  elegant  in  manners, 
systematic,  conscientious,  powerful  with  the  pen  and  generally  versatile  in  accom- 
plishments, at  the  age  of  forty-one  saw  his  property  vanish  in  the  cyclone  of  1825. 
Amid  widespread  ruin  his  eye  fell  upon  a  notice  in  a  Hartford  newspaper  of  the 
formation  of  the  Protection  Insurance  Company.  Having  lost  by  the  perils  of  inland 
navigation,  his  vision,  further  sharpened  by  mental  pain,  saw  at  once  the  utility  and 
beneficence  of  the  scheme.  With  his  own  experience  as  a  text  to  preach  from  he 
felt  that  he  had  a  call  to  go  forth  into  the  world  to  save  others  from  the  ruin  that  had 
overtaken  himself. 

Son  of  Ephraim  Robins,  Sr.,  of  Hartford,  Conn.,  in  1797,  at  the  age  of  thirteen, 
he  entered  the  employ  of  Harrison,  Wilby  &  Co.,  of  Boston,  importers  of  English 
queensware.  Later  he  established  a  business  in  New  York  city,  which  he  transferred 
to  Cincinnati  in  1820. 

When  the  possibilities  of  the  West  as  a  field  for  insurance  flashed  upon  him  he 
hurried  to  Hartford,  on  the  way  working  out  the  details  of  his  scheme.  Seeking 
Mr.  Perkins  he  presented  the  advantages  certain,  as  he  argued,  to  accrue  to  the  com- 
pany from  the  establishment  of  a  branch  agency  at  Cincinnati,  in  the  heart  of  a  new 
and  growing  region,  with  the  power  of  appointment,  removal  and  supervision  in  the 
hands  of  a  competent  general  manager. 

Both  the  secretary  and  the  directors  were  convinced.  Mr.  Robins  was  accord- 
ingly made  general  agent  and  put  in  charge  of  the  western  department.  Returning 
to  Cincinnati  September  i,  1825,  he  rented  for  an  office  the  vacant  banking  house  of 
the  ]\Iiami  Exporting  Company.  Selecting  John  P.  Foote,  a  well  and  widely  known 
resident,  he  sent  him  out  through  Ohio  and  other  states  to  select  in  important  towns 
the  best  available  men  for  agents.  These  carefully  instructed  and  trained,  within  a 
few  3^ears,  numbered  two  hundred  and  fifty,  and  from  their  general  character  gave  a 
high  standing  to  the  company. 

The  office  in  Cincinnati,  furnished  with  the  leading  newspapers  of  the  day  and 
warmed  in  winter  by  hickory  logs  burning  in  a  broad  open  fire-place,  was  also  a  sort 
of  club  room  for  the  local  chiefs  of  the  Whig  Party.  It  was  frequented  by  General 
William  H.  Harrison,  Bellamy  Storer,  Judge  Burnet,  Isaac  G.  Burnet,  DanielDrake, 
Alphonso  Taft,  Nicholas  Longworth  and  many  others  who  met  to  talk  over  public 
affairs. 

In  a  business  way  the  office  became  a  normal  school  in  which  fire  insurance  in 
progressive  and  systematized  form  was  taught  to  employees  and  agents. 

Mr.  Robins  died  in  1846,  having  in  the  twenty  years  taken  three  millions  in 
premiums,  of  which  ten  per  cent,  on  an  average  went  to  the  company  in  profits. 

Meanwhile  changes  occurred  in  the  management.  Mr.  Ellsworth  retired  in 
1836.  Subsequent  presidents  were  David  F.  Robinson,  1836-9;  Hezekiah  King, 
1839-40;  Eliphalet  Averill,  1 840-1  ;  Daniel  W.  Clark,  1841-54.  Secretaries  were 
Thomas  C.  Perkins,  1826-37  ;  James  L.  Goodwin,  1837-40  ;  William  Conner,  1840-54. 

As  the  Protection  was  the  pioneer  in  organizing  the  ageucv  system  on  a  com- 
3 


34  INSURANCE   IN  CONNECTICUT. 

preliensive  scale,  so  it  was  the  first  to  employ  a  special  agent  for  the  exclusive  work 
of  travel,  supervision  and  adjustment.  In  this  capacity  Mark  Howard  entered  the 
servdce  of  the  company  in  1846.  Railways  were  then  few.  Mr.  Howard  traveled 
east  and  west,  north  and  south,  from  Maine  to  Louisiana,  mostly  by  canal,  stage  and 
steamboat. 

The  three  Hartford  companies  then  in  existence  suffered  bitterly  by  the  St. 
Louis  fire  of  1849.  The  losses  of  the  Protection  exceeded  $130,000,  and  coming  as  a 
climax  in  a  season  of  woeful  disasters  led  the  management  to  debate  the  question  of 
giving  up  the  fight  for  life  without  further  struggle.  ]\Ir.  Howard  denounced  the 
proposal  and  volunteered  to  go  in  person  to  settle  the  claims,  although  cholera  was 
raging  in  the  city.  He  found  the  streets  deserted.  Thousands  had  fled  and  scores 
were  dying  daily.  Undaunted  he  walked  into  the  pestilence.  Adjusting  and  paying 
in  full  all  claims  against  his  own  company  and  the  ^tna,  he  added  much  to  the 
general  confidence  already  felt  in  Hartford  underwriters. 

Correct  theories  of  fire  insurance,  so  far  as  a  line  of  effort  so  uncertain  and 
variable  can  claim  a  scientific  basis,  have  been  developed  slowly  and  enforced  by 
countless  failures.  During  the  first  half  of  the  century  companies  lived  from  hand 
to  mouth.  When  afl!"airs  ran  cheerfully,  current  profits  were  scattered  in  dividends. 
Premiums  at  the  instant  of  receipt  were  assumed  to  be  fully  earned.  A  few  years 
of  continuous  prosperity  always  saw  the  birth  of  a  lot  of  weaklings  that  lived  just 
long  enough  to  give  a  bad  name  to  the  business.  To  meet  competition  rates  dropped 
to  levels  that  barely  yielded  living  returns  under  the  most  favorable  conditions.  No 
preparations  were  made  for  impending  evils.  Yet  panics,  followed  by  stagnation 
and  an  enormous  increase  of  the  "moral  hazard,"  succeed  periods  of  hope  and  boom 
as  wave  chases  wave.  Institutions  had  not  then  learned  the  imperative  need  of 
piling  up  reserves  in  good  times  to  meet  the  drains  that  bad  times  will  surely  bring. 
Consequently  the  history  of  fire  insurance  during  the  first  six  decades  of  the  century 
is  mostly  a  history  of  wreck  and  ruin.  Those  that  survived  the  stage  of  ignorance 
pulled  through  by  virtue  of  the  personal  faith  and  courage  of  managers. 

W.  B.  Robins  succeeded  his  father  in  1846,  continuing  in  charge  of  the  depart- 
ment till  the  company  susi^ended.  Before  the  close  four  hundred  agents  reported 
to  him.  During  the  eight  years  he  took  two  millions  in  premiums,  with  a  fair 
average  of  profit.  As  St.  Louis  reported  directly  to  the  home  office  the  adverse 
balance  arising  from  the  fire  of  1 849  was  not  charged  against  him. 

Measured  by  the  standard  of  local  contemporaries  the  Protection  exceeded  the 
average  in  mistakes.  Exhaustive  dividends  were  declared  as  a  matter  of  course 
whenever  there  was  an  apparent  surplus.  The  management  clung  to  losing  lines. 
They  insured  whaling  ships  after  the  industry  was  clearly  doomed.  They  sought 
the  coasting  trade  despite  continuous  disaster. 

A  reported  interview  between  President  Clark  and  ]\Iark  Howard  exposes  the 
distress  of  the  treasur\-. 

"Have  3'ou  made  money  on  distilleries?"  asked  Mr.  Howard.  "No,"  replied 
Mr.  Clark,  "we  are  far  behind  on  them." 

"Have  you  made  money  on  paper-mills?  "  "No.  On  paper-mills  the  balance 
is  heavily  against  us." 

"How  is  it  with  wholesale  drug  stores?"  "Oh,  on  them  we  have  lost  right 
along. ' ' 

"Well,  Mr.  President,  are  you  still  insuring  distilleries,  paper-mills  and  whole- 
sale drug  stores?"     "Yes,  we  are.      He  must  have  t/ie premtitms.'' 

Mr.  Howard  saw  the  drift  of  affairs  too  clearlv  not  to  forecast  the  inevitable. 


INSURANCE   IN   CONNECTICUT.  35 

Loyal  to  the  company,  he  at  first  remonstrated  against  the  continuance  of  ruinous 
methods,  and  when  his  warnings  passed  unheeded  quietly  withdrew. 

In  1845  the  capital  was  increased  to  ;g200,ooo,  and  in  1849  to  the  nominal  sum 
of  §300,000,  but  grounded  on  the  figures  $291,800,  and  there  held  fast.  During  the 
last  years  one-half  was  represented  by  stock-notes  and  one-half  by  cash.  Final 
statements  to  state  authorities  were  strained  to  make  as  fair  a  showing  as  a  certain 
vague  traditional  regard  for  truth  would  permit.  At  last,  on  the  7th  of  September, 
1854,  amid  heart-burnings  and  reproaches,  aggravated  by  calls  to  pay  the  stock- 
notes  lodged  in  banks  as  security  for  loans,  the  suspension  of  the  company  was 
formally  announced. 

The  collapse  of  the  Protection,  by  directing  attention  to  both  the  strong  and  the 
weak  features  of  its  policy,  taught  lessons  that  were  not  lost.  Other  Hartford  com- 
panies profited,  not  only  by  taking  on  a  large  share  of  its  business,  but  by  accessions 
from  its  disbanding  ranks  of  bright,  energetic,  well-trained  agents.  In  the  fall  of 
1^53)  J-  B.  Bennett  abandoned  the  sinking  ship,  and  under  contract  with  the  ^tna 
took  full  charge  of  its  western  business,  with  headquarters  in  Cincinnati.  Young, 
magnetic,  and  overflowing  with  mental  resources,  he  pushed  the  work  with  unpre- 
cedented vigor.  In  the  next  seventeen  years  the  branch,  through  a  thousand  subor- 
dinate agents,  handled  seventeen  millions  of  premiums,  of  which  over  three  and 
one-half  millions  accrued  to  the  home  office  in  profits.  F.  C.  Bennett,  brother  of 
J.  B. ,  and  also  a  graduate  of  the  Protection,  has,  since  1871,  had  charge  of  the 
business  of  the  >55tua  in  the  Central  West.  Another  graduate,  H.  M.  Magill,  a 
versatile  and  accomplished  underwriter,  has  long  been  general  agent  of  the  Phcenix, 
of  Hartford,  managing  from  Cincinnati,  its  department  made  up  of  southern  and 
western  states.  Mark  Howard  organized  the  Merchants',  and  after  the  Chicago  fire, 
the  National.  The  list  might  be  extended  to  include  notices  of  W.  H.  Wyman, 
J.  W.  G.  Simrall,  Samuel  E.  Mack,  J.  C.  Mitchell,  J.  C.  Davies,  and  others  of  high 
repute  in  the  upbuilding  of  insurance  interests  in  America. 


CHAPTER    IV. 

INSURANCE    IN    C O NNEC TIC UT— Continued. 

SECURITY   INSURANCE  COMPANY   (NEW   HAVEN). 

'HIS  company  was  chartered  in  1841  as  the  IMutual  Security,  with  the  view 
of  doing  business  on  both  the  stock  and  mutual  plans.  The  latter  feature 
was  abandoned  in  1843.  For  a  long  time  the  paid  capital  remained 
$50,000.  In  1872  it  was  increased  to  gioo,ooo,  and  in  '75  to  §200,000.  It 
fortuuateh'  escaped  the  great  fires  of  Chicago  and  Boston.  From  1S41  till 
1872  the  Security  did  mainly  an  ocean  marine  business,  confining  its  fire  risks  to 
New  Haven  and  vicinity.  It  then  made  a  radical  change  of  policy,  reducing  its 
marine  risks  to  a  small  volume,  and  extending  the  fire  business  till  it  now  has  about 
one  thousand  agencies,  covering  nearly  all  of  the  Eastern  and  Western  states.  Hav- 
ing paid  in  losses  §6,425,107,  and  dividends  averaging  over  8  per  cent,  annually  for 
fifty-six  years,  it  had,  January  i,  1897,  capital,  §200,000;  assets,  §755,666;  and  net 
surplus,  §123,257. 


§1 


36  INSURANCE   IN  CONNECTICUT. 

Presidents  in  snccession  have  been  Joseph  N.  Clark,  Theron  Towner,  Jnstns 
Harrison,  William  Lewis,  Willis  Bristol,  John  S.  Griffing,  Charles  Peterson  and 
Charles  S.  Leete. 

H.  Mason  succeeded  Philip  S.  Galpin  as  secretan,-  and  manager  in  1871,  and  has 
held  the  position  since. 

The  company  has  been  a  favorite  in  New  Haven,  having  from  time  to  time  in 
its  directorate  many  of  her  most  prominent  business  men. 

THE   CITY   FIRE  (HARTFORD). 

The  company  that  came  at  last  to  be  known  as  the  "City  Fire,"  of  Hartford, 
was  long  in  getting  a  start  and  a  name.  Chartered  in  1847  as  the  Connecticut 
Mutual  Fire,  with  the  view  of  apiDlying  the  mutual  principle  to  the  insurance  of 
property  in  cities,  it  soon  learned  that  this  was  not  the  kind  of  protection  which 
merchants  and  town  residents  desired.  By  an  amendment  secured  in  185 1,  the  cor- 
poration was  authorized  to  raise  a  guaranty  capital  of  not  less  than  ^50,000,  nor  over 
^100,000.  It  began  at  the  full  limit.  Ten  per  cent,  was  paid  in  cash,  and  90  per 
cent,  secured  by  stock-notes.  In  1S53  the  name  was  changed  to  the  Hartford  City 
Fire  Insurance  Company,  but  as  the  "Old  Hartford"  protested  vigorously  against 
such  enroachment  upon  its  vested  rights,  the  word  Hartford  was  dropped  the  follow- 

year. 

The  company  did  not  organize  for  work  prior  to  1853.  Leverett  Brainard,  who 
has  since  in  many  ways  been  actively  identified  with  the  industries  and  institutions 
of  Hartford,  moved  thither  to  take  the  secretaryship,  Ralph  Gillett  becoming  presi- 
dent. A  careful  policy  was  followed  by  uniform  prosperity  till,  with  few  mistakes 
to  regret,  it  was  suddenly  destroyed  by  the  Chicago  fire  of  1871.  The  capital  was 
increased  to  $150,000  in  1856,  and  two  years  later  to  $250,000,  where  it  afterwards 
remained.  For  1870  its  premiums  reached  $346,560.  On  the  ist  of  January-,  1S71, 
it  had  gross  assets  of  $554,287,  and  a  net  surplus  of  ^69, 163. 

Mr.  Brainard  resigned  January  i,  1858,  to  enter  the  partnership  of  Case,  Lock- 
wood  S:  Co.,  which  has  long  been  one  of  the  leading  printing  and  book-binding 
houses  in  New  England.  He  was  succeeded  by  C.  C.  Waite,  who  left  in  1S62,  and  is 
better  known  in  hotel  than  in  insurance  circles.  William  E.  Baker  was  secretary' 
1862-4,  and  George  W.  Lester,  1864-71. 

Presidents  were  Ralph  Gillett,  H.  D.  Condict,  C.  B.  Bowers,  W.  E.  Baker  and 
C.  T.  Webster. 

THE  BRIDGEPORT  FIRE  AND  MARINE  INSURANCE  COMPANY. 
This  company  was  incorporated  in  1850,  but  did  not  organize  until  1854.  It  be- 
gan with  a  capital  of  $100,000,  ten  per  cent,  paid  in  cash  and  ninety  per  cent,  in  the 
customary  stock-notes.  No  shareholder  was  permitted  to  vote  on  over  sixty  shares 
at  annual  or  special  meetings.  Besides  the  ordinary  fire  risks  it  was  authorized  to 
insure  against  perils  of  the  seas  and  of  inland  navigation.  In  1856  the  capital  was 
increased  to  $300,000,  and  in  1857  the  name  was  changed  to  the  Bridgeport  Insurance 
Company.  At  the  close  of  1857  the  company  claimed  to  have  assets  valued  at  $367,- 
000,  with  liabilities  present  and  prospective  of  $70,000.  At  this  juncture  the  comp- 
troller of  New  York  refused  to  renew  its  license  to  do  business  in  that  state,  not  on 
account  of  the  slight  technical  impairment  of  the  capital,  but  because  its  securities 
were  of  doubtful  character.  On  the  assurance  of  the  officers  that  its  afiairs  were  in 
sound  condition,  the  comptroller  finally  consented  to  recall  his  adverse  decision  on 
the  understanding  that  an  agent  of  his  own  selection  should  be  permitted  to  make  a 
full  examination  of  its  affairs.     Early  in  February  he  appointed  Samuel  B.  Ruggles. 


INSURANCE   IN  CONNECTICUT.  37 

Nathaniel  Green,  acting  president  of  the  company,  on  the  17th  of  March  submitted 
to  Mr.  Ruggles  his  sworn  statement  that  Joseph  Richardson,  an  original  director  of 
the  company  and  still  a  director,  had  in  1S57  given  to  the  company  bonds  of  sound 
corporations  amounting  to  $98,000,  in  exchange  for  $26,000  of  its  own  stock,  and 
$,150,000  in  the  stock  of  the  Hudson  Coiinty  Paint  Manufacturing  Company,  and  that 
the  transfer  was  absolute  and  unconditional.  To  the  affidavit  Richardson  appended 
his  certificate  setting  forth  that  the  statements  were  correct. 

Mr.  Ruggles  left  Bridgeport  apparently  satisfied.  A  few  days  later  Richardson, 
trembling  for  the  safety  of  his  securities,  turned  iip  in  Albany  for  the  purpose  of 
denying  the  truth  contained  in  the  affidavit  and  certificate.  He  alleged  that  he  could 
not  read  writing  and  had  been  deceived  by  Green.  With  this  new  light  the  commis- 
sioner reported,  April  20,  1858,  that  the  company  did  not  possess  the  amount  of  cap- 
ital, ;$  150,000,  required  by  the  statute,  unimpaired  to  the  extent  of  twenty-five  per 
cent.,  and  that  in  his  opinion  its  affairs  were  in  an  emphatically  unsound  condition. 
From  the  evidence  submitted  by  Mr.  Ruggles  the  comptroller  was  convinced  that 
nearly  all  the  assets  of  the  company  of  much  real  value  were  not  in  fact  the  propert}' 
of  the  institution.  He  accordingly  revoked  the  certificate  given  conditionallv  a  few 
months  before. 

In  1857  the  company  was  excluded  from  Massachusetts,  the  commissioners  ex- 
plicitly cautioning  the  public  against  making  any  further  engagements  with  it. 

Driven  from  two  important  states,  and  discredited  elsewhere,  it  went  into  insol- 
vency May  27,  1858.     Philo  C.  Calhoun  was  appointed  trustee. 

Presidents  were  P.  :M.  Thorp,  H.  W.  Chatfield,  Thomas  E.  Courteney  and 
Nathaniel  Green.     Secretaries  :  J.  H.  Washburn  and  Timothy  Hough. 

THE  CITY  INSURAN'CE  CO:\:PANY  OF  NEW  HAVEN 
was  incorporated  in  1850,  with  a  capital  of  $100,000.  Before  proceeding  to  business, 
the  subscribers  were  required  to  pay  in  ten  per  cent.,  to  deposit  securities  for  forty  per 
cent.,  and  to  give  personal  securit}-  for  the  balance.  At  first  the  company  was  em- 
powered to  issue  policies  against  loss  by  fire  and  inland  navigation,  but  in  1855 
marine  risks  of  ever>-  kind  were  expressh-  prohibited.  Wells  Southworth  was  the 
first  president,  and  Henn,"  L,.  Cannon,  secretarj'.  For  a  number  of  years  they  made 
money,  but  about  the  time  the  war  ended  the  tide  had  turned  and  the  managers 
reasoned  that  their  interests  would  be  best  served  by  retiring  from  the  field.  Having 
decided  on  this  course,  they  closed  the  aff"airs  of  the  company,  paying  in  full  all 
claims  and  140  per  cent,  on  the  cash  investment  to  stockholders. 

For  nearly  ten  years  the  charter  lay  dormant.  In  1874  it  was  purchased  b}' 
James  M.  IMason,  E.  J.  I\Iason  and  H.  Mason,  and  the  company  was  revived  under 
the  presidency  of  James  M.  Mason.  The  subscribers  paid  in  the  capital,  as  required 
by  the  original  act,  $50,000  in  cash  and  in  pledges  of  securities,  and  $50,000  in  stock- 
notes.  It  confined  its  operations  to  the  home  field,  and,  after  a  trial  of  two  years, 
again  retired  from  business  without  loss  of  principal  to  the  parties  who  risked  their 
mone}'  to  repeat  the  experiment. 

THE  CONNECTICUT  FIRE  INSURANCE  COMP.A.NY  (HARTFORD). 

This  institution  was  organized  in  June,  1850,  with  a  capital  of  $200,000,  of 
which  ten  per  cent,  was  paid  in  cash,  and  ninety  per  cent,  in  stock-notes.  On  the 
29th  of  the  month  the  stockholders  elected  as  directors  Joseph  Trumbull,  Benjamin 
W.  Greene,  James  B.  Hosmer,  David  F.  Robinson,  Julius  Catlin,  Harvey  Seymour, 
Edwin  D.  IMorgan,  James  Dixon,  Edmund  G.  Howe,  Tertius  Wadsworth,  Timothy 


38  INSURANCE   IN  CONNECTICUT. 

M.  Allen,  John  h-  Bnnce  and  Edson  Fessenden.     The  same  day  Benjamin  W.  Greene 
was  elected  president,  and,  July  4th,  John  B.  Eldredge  was  appointed  secretarj'. 

By  a  policy  deliberately  adopted  and  consistently  pursued,  the  management 
restricted  the  operations  of  the  company  to  non-hazardous  risks,  subordinating  am- 
bition for  large  receipts  to  desire  for  safetN'.  For  similar  reasons,  agencies  were 
planted  with  caution,  and  chiefly  in  towns  with  well-equipped  fire  departments.  By 
the  end  of  June,  1855,  total  dividends  in  cash  amounted  to  gio.  5oper  share,  while 
$15.00  per  share  had  been  endorsed  on  the  stock-notes.  At  this  time  the  directors 
voted  to  raise  the  cash  capital  to  f  100,000  by  calling  for  an  instalment  of  twenty-five 
percent.,  payable  on  or  before  July  28th.  Thenceforward  it  became  the  settled 
policy  of  the  company  to  extinguish  the  stock-notes  by  the  application  of  net  earn- 
ings, which  were  devoted  exclusively  to  that  end.  On  the  i6th  day  of  July,  1859, 
the  task  was  accomplished,  and  the  shares  became  fully  paid,  sixty-five  per  cent, 
having  been  contributed  from  profits.  At  the  end  of  the  year  assets  in  round  num- 
bers amounted  to  $231,000;  liabilities,  including  re-insurance  reserve,  to  $32,600; 
gross  premiums  for  1859,  to  $78,000  ;  and  gross  income,  to  $90,000. 

At  the  end  of  the  first  decade  the  company  had  made  enough  on  a  small  but 
carefully  conducted  business,  to  virtually  pay  ninety  per  cent,  in  instalments  on  the 
stock.  It  had  sixty-three  agents,  a  surplus  of  about  $4,000,  and  a  premium  income 
of  less  than  $80,000. 

In  October,  1865,  Benjamin  W.  Greene  resigned,  and  Mr.  Eldredge  was  elected 
president.  i\Ir.  Greene  had  been  an  active  director  in  the  Protection,  and  had  earn- 
estly but  vainly  protested  against  the  policy  which  ended  in  its  destruction.  He 
was  born  in  1801  at  Uxbridge,  Mass.  At  the  age  of  fourteen  he  moved  to  Windsor, 
Vt.,  and  thence  to  Hartford,  where  he  had  a  saddle  and  harness  factory  on  Pratt 
street,  with  James  B.  Hosmer  for  a  silent  partner.  Warned  by  the  fate  of  the  Pro- 
tection, he  studiously  shunned  its  errors.  Of  his  conservatism  it  was  facetiously 
said  that  if  he  insured  a  load  of  pig  iron  in  a  ten-acre  lot,  he  would  lie  awake  nights 
fearing  it  would  take  fire  from  spontaneous  combustion.  He  died  soon  after  his 
resignation. 

Martin  Bennett,  who,  fresh  from  college,  entered  the  service  of  the  company  as 
general  agent  and  adjuster  in  August,  i860,  was  elected  secretary,  October  23,  1865. 
Two  years  later,  in  December,  1867,  Charles  R.  Burt  was  made  assistant  secretarj-. 

In  1 87 1,  after  twenty  years  of  continuous  prosperity,  the  company  was  brought 
to  the  brink  of  destruction  by  the  Chicago  fire.  Its  losses  far  exceeded  its  assets. 
Payment  in  full  was  out  of  the  question.  Two  courses  only  lay  before  it,  either  to 
go  into  bankruptcy  and  give  up  all,  including  good  will  and  a  well-established  busi- 
ness, or  to  compromise  with  the  policy-holders  in  that  city.  Amid  the  confusion 
and  jar  of  conflicting  interests  a  committee  of  seven  had  been  selected  to  represent 
the  sufferers.  They  were  men  of  such  character  and  standing  that  their  decision  was 
accepted  as  final.  To  them  were  presented  the  proposals  of  the  companies  that  had 
anything  to  offer  between  complete  surrender  and  payment  in  full.  M.  Bennett,  Jr., 
its  secretary,  made  a  determined  effort  to  secure  a  settlement  for  the  Connecticut  and 
succeeded.  The  facts  were  a  matter  of  record.  Official  returns  showed  assets  and  lia- 
bilities on  the  first  of  January.  Nine  months  of  ordinary  business  could  not  greatly 
change  the  figures.  So  far  as  the  local  situation  was  concerned,  the  committee  had  a 
list  of  the  policies,  and  of  the  loss  inider  each.  If  the  company  went  on,  it  must  carrj' 
all  the  risks  on  its  books,  and  pay  in  full  subsequent  losses.  Two  apparent  elements 
of  uncertainty  entered  into  the  question  :  the  effect  on  prices  of  the  large  outpour  of 
securities  from  companies  forced  into  insolvency,  and  the  fatality  of  existing  risks. 


BENJAMIN  W.  GREENE, 
President  1850-1865, 


CHAS,    K.    IJURT, 
Secretary. 


JOHN  B.  ELDRID(iK. 
President   1865-1S73. 


JOHN  D.  BROWNE, 
P  resident. 


MARTIN  P.ENNET'l 
President    1873- 


L.  W.  CLARK. 

Ass't  Secretary. 


.\     WIM.I.VMS, 
Late  Western  JNLuiagcr. 


CONNECTICUT   FIRE   INSURANCE   COMPANY 


INSURANCE   IN  CONNECTICUT.  39 

Mr.  Bennett  believed  that  the  company  could  pay  thirty-five  per  cent,  and  go  on. 
Tlie  committee,  after  a  careful  examination,  concluded  that  the  proposal  was  fair  to 
all  parties  and  accordingly  endorsed  it.  Policy-holders  accepted  the  decision  as 
equitable,  the  money  was  paid,  and  thus  the  Connecticut  was  enabled  to  save  both 
its  charter  and  its  plant. 

During  the  next  few  months  general  conditions  greatly  favored  the  insurance 
interest.  The  absorption  of  securities  by  newly-formed  companies,  and  by  the  fresh 
capital  put  into  those  that  sur\nved,  held  up  prices  beyond  expectation  and  thus 
added  to  the  salvage.  On  account  of  higher  rates  and  diminished  facilities  the 
insured  carried  an  increased  percentage  of  risks,  and  hence  used  greater  care  in 
guarding  against  fire.  For  a  time  premiums  rose  above  and  losses  fell  below  the 
average.  From  both  cairses  the  Connecticut  derived  unforeseen  benefits  from  its 
settlement. 

Underwriters  were  taught  by  the  hard  lesson,  that  the  day  of  small  companies 
had  gone  to  return  no  more,  and  accordingly,  after  the  removal  of  the  dibris,  the 
Connecticut  reorganized  with  a  fully  paid  capital  of  $500,000.  A  year  later,  the 
Boston  conflagration  called  for  $132,580,  but  within  a  few  weeks  the  premium  income 
more  than  repaired  the  loss.  January  28,  i^^j^^  Mr.  Eldredge  resigned  the  presidency. 
The  same  day  Martin  Bennett  was  elected  to  fill  the  vacancy,  and  Charles  R.  Burt 
was  made  secretary'.  On  the  28th  of  the  following  June,  James  H.  Brewster  was 
elected  assistant  secretary-. 

Mr.  Eldredge  remained  an  active  member  of  the  directory  till  his  death  in  June, 
1882.  In  early  life  he  was  connected  with  the  press,  having  edited  the  Connecticut 
Sentinel^  in  New  London,  and  the  Springfield  Whig.  In  1835  he  established  in 
Hartford  the  Patriot  and  Democrat^  which  was  later  merged  in  the  State  Eagle  and 
under  that  name  expired  in  1842.  He  was  appointed  marshal  for  the  state  in  1840, 
and  after  retiring  from  office  engaged  in  the  boot  and  shoe  trade.  During  life  he 
gave  to  various  charities  with  a  liberal  hand  and  left  a  large  estate. 

In  November,  1876,  the  company  voted  to  increase  the  capital  to  $1,000,000. 
An  extra  dividend  of  $20  per  share  was  voted  in  December  to  apply  on  the  new 
stock,  and  the  remaining  eighty  per  cent,  was  paid  in  cash.  On  January  i,  1877,  its 
statement  showed  a  net  surplus  of  over  eighteen  per  cent,  on  the  enlarged  capital. 

After  twenty  years  of  continuous  and  faithful  service  Mr.  Bennett  resigned  the 
presidency  October  11,  18S0,  to  take  the  general  management  for  the  United  States 
of  the  Lion  and  Scottish  Union.  Mr.  Brewster  also  resigned  the  same  day.  On 
the  1 6th  J.  D.  Browne  was  elected  president.  February  i,  1881,  L.  W.  Clark,  late 
president  of  the  Meriden  Insurance  Company,  was  elected  assistant  secretary-. 

Born  at  Plainfield,  Conn.,  August  26,  1836,  at  the  age  of  twenty-one  Mr.  Browne 
moved  to  ^Minneapolis,  where  with  youthful  ardor  he  engaged  in  business.  He  was 
selected  to  take  the  electoral  vote  of  Minnesota  to  Washington  in  the  fall  of  i860. 
During  the  administration  of  President  Lincoln  be  was  chief  clerk  in  the  office  of 
the  surveyor-general  of  public  lands  at  St.  Paul.  In  1865  Mr.  Browne  returned  to 
the  East,  becoming  general  agent  and  adjuster  for  the  Hartford  Fire  Insurance  Com- 
pany in  1867.  Three  years  later  he  was  elected  secretar}^  of  the  company,  and  held 
the  position  till  called  to  the  presidency  of  the  Connecticut. 

The  home  office  of  the  Connecticut,  completed  in  1885,  is  one  of  the  most 
notable  structures  in  the  city,  combining  beauty  and  utility  to  a  degree  rarely 
attained.  The  location  at  the  corner  of  Prospect  and  Grove  streets,  within  a  block  of 
City  Hall  Square  on  the  north,  and  Main  street  on  the  west,  is  central,  quiet,  and  in 
every  way  desirable.     It  is  built  of  brick,   brown  stone  and  terra  cotta,  after  the 


40  INSURANCE   IN  CONNECTICUT. 

Byzantine  style  of  architecture,  fifty-eight  by  one  hundred  and  twenty  feet,  two 
stories  in  height,  with  an  hexagonal  tower  of  three  stories,  every  part  of  which  is 
utilized.  The  general  office,  forty  by  forty-five,  with  ceiling  twenty  feet  high, 
lighted  and  ventilated  on  three  sides,  is  not  only  admirably  adapted  to  the  present 
requirements  of  the  business,  but  will  answer  equally  well,  when  its  magnitude  shall 
have  expanded  four  or  five  fold.  Directly  in  the  rear  of  this  is  placed  the  vault, 
twenty  feet  square  on  the  floor,  and  twenty-two  feet  high,  so  arranged  with  galleries 
and  light  stair-cases  as  to  afford  a  maximum  of  available  and  easily  accessible  space. 
Underneath  is  a  second  vault  of  equal  length  and  breadth,  which  will  ultimately  be 
needed  for  storage  purposes.  The  vestibule,  the  rooms  of  the  directors  and  president, 
and  the  large  clerical  room,  all  finished  in  hard  woods,  are  models  of  quiet  elegance. 
The  company  occupy  the  entire  building,  and  all  the  supplies  of  a  large  insurance 
company  can  be  prepared  for  shipment  within  its  walls.  Built  upon  land  advantage- 
ously purchased  at  a  time  when  the  cost  of  material  and  labor  was  low,  the  enterprise 
has  proved  profitable  in  giving  every  desirable  convenience  at  the  equivalent  of  a 
small  rental. 

Since  the  date  of  reorganization  in  1871,  the  history  of  the  Connecticut  is  the 
record  of  uninterrupted  progress,  which,  though  bare  of  dramatic  incidents,  is  of  a 
kind  to  bring  contentment  to  patrons  and  solid  satisfaction  to  shareholders.  The 
books  show  gross  assets  of  51,483,480.02,  ;g2, 347,692. 99  and  ^3, 300,017.88  on  the  ist 
of  January  for  the  years  1880,  1890  and  1S97  respectively ;  and  at  the  same  dates  a 
net  surplus  of  ^209,662.34,  ^522, 254.96  and;g668,33i.50,  and  for  the  years  preceding 
the  above  dates  premiums  of  $399,348.07,  ;$i, 069,531, 04  and  ^1,724,851.53. 

For  twelve  years  prior  to  January  i,  1897,  all  dividends  were  paid  exclusively 
out  of  income  from  assets,  and  a  balance  of  over  $325,000  from  this  source  alone 
was  added  to  the  general  fund  for  the  protection  of  policy-holders. 

Charles  R.  Burt,  secretary,  has  been  identified  with  the  company  from  boyhood, 
having,  after  an  active  connection  with  the  local  agency  for  several  years,  entered 
the  office  as  clerk  in  1S65,  at  the  age  of  twenty.  In  December,  1867,  he  was  made 
assistant  secretary,  and  in  January,  1873,  secretan.'.  Though  still  in  the  prime  of 
manhood,  he  is  a  patriarch  among  local  underwriters,  very  few  surviving  who  were 
active  in  the  business  when  he  joined  the  ranks. 

L.  Walter  Clark,  born  in  Cornwall,  Conn.,  entered  the  insurance  field  in  1S65,  as 
special  agent  for  the  Home  of  New  Haven.  Shortly  before  the  Chicago  fire  of  1871 
he  took  the  \ice-presidency  of  the  Enterprise  of  Philadelphia,  which  went  down 
through  losses  incurred  by  that  calamity.  After  a  brief  term  as  special  agent  with 
the  Springfield  Fire  and  Marine,  he  accepted  the  presidency  of  the  Meriden,  but 
resigned  in  1881  to  enter  the  Connecticut. 

Abram  Williams,  a  man  of  mature  judgment,  who  had  been  at  the  head  of  the 
western  department  from  the  time  of  its  formation,  died  at  Chicago  in  January,  1897. 

Robert  Dickson  manages  the  Pacific  department,  from  San  Francisco.  The 
business  of  the  Atlantic  and  Gulf  states,  inclusive  of  Ohio,  is  managed  from  the 
home  office. 

THE  PHCENIX  FIRE  INSURANCE  COMPANY  (H.\RTFORD). 

In  1853  the  late  Henry  Kellogg  was  bookkeeper  of  the  Connecticut  Mutual  Life. 
On  the  death  of  its  Boston  agent,  he  applied  for  the  vacant  place,  believing  that  he 
had  fairly  earned  promotion.  To  his  chagrin,  the  situation  was  given  to  another, 
whose  record  for  the  company  was  yet  to  be  made.  By  way  of  explanation,  he  was 
told  that  he  could  not  be  spared  from  the  position  he  then  held.  Sensitive,  ambi- 
tious, and  conscious  of  capacity,  he  concluded  that  if  his  services  were  so  valuable  to 


INSURANCE   IN  CONNECTICUT.  41 

others,  the  time  had  come  to  make  them  more  vahiable  to  himself.  On  a  survey  of 
the  fiekl,  lie  felt  that  a  new  fire  insurance  company  in  Hartford  could  be  made  a  suc- 
cess— possibly  a  striking  success.  Friends  caught  his  enthusiasm,  and  ])romised 
their  aid.  Thus  encouraged,  he  selected  the  corporators  of  the  Phcenix,  drew  the 
charter,  and  saw  it  safely  through  the  legislature. 

By  the  terms  of  the  charter  the  capital  was  placed  at  not  less  than  S  100,000, 
•with  the  privilege  of  increase  to  any  sum  not  exceeding  $300,000.  Books  were 
opened  by  the  corporators  June  2i,  1854,  and  stock  to  the  amount  of  5 100,000,  the 
limit  agreed  upon,  was  subscribed  at  once.  The  same  day  the  subscribers  elected 
the  following  directors:  Chester  Adams,  Erastus  Smith,  Nathan  I\I.  Waterman,  John 
A.  Butler,  William  Faxon,  Samuel  B.  Beresford,  Elisha  T.  Smith,  James  C.  Walk- 
lev,  Lyman  Stockbridge,  Edwin  T.  Pease,  Joseph  Merriman,  Nathaniel  H.  Morgan 
and  Ral^jli  Chene}-. 

Before  adjournment  the  stockholders  voted  to  increase  the  capital  to  $200,000. 
One  week  later,  June  28th,  the  books  were  reopened  and  the  additional  shares  eagerly 
taken.     There  were  then  one  hundred  and  three  separate  subscriptions. 

Mr.  Kellogg  took  the  secretaryship  with  the  view  of  making  the  development  of 
the  enterprise  the  work  of  his  life.  As  a  matter  of  convenience  Nathaniel  H.Mor- 
gan consented  to  act  as  president  temporarily  till  a  man  possessing  the  requisite 
technical  knowledge  and  other  needed  qualities  could  be  found.  Mr.  Morgan,  the 
fourteenth  of  seventeen  children,  was  born  June  8,  1805,  in  Salem,  then  a  part  of 
Colchester,  whence  the  family  moved  to  Lebanon  in  18 14.  Having  settled  in  Hart- 
ford, as  merchant,  captain  in  the  coasting  trade,  a  trusted  servant  of  the  town  in  dif- 
ferent offices,  a  student  of  genealogy  and  local  histon.-,  he  filled  a  long  life  with  a 
gi-eat  variety  of  useful  work.  Through  his  efforts  the  Halls  of  Record  were  built  at 
the  corner  of  Pearl  and  Trumbull  streets. 

At  the  time  of  subscription  $10  per  share  were  paid  in  cash,  and  soon  after  the 
remaining  ninety  per  cent,  was  secured  by  stock-notes.  At  the  end  of  the  first  j'car, 
or  more  exactly  June  27,  1S55,  Simeon  L-  Loomis  was  elected  president.  From  the 
yEtna  he  had  gone  to  New  York  city  to  organize  the  Home  Insurance  Company,  but 
gladly  accepted  the  invitation  to  return  to  Hartford.  Messrs.  Loomis  and  Kellogg, 
working  in  complete  harmony,  mapped  out  the  policy  which  the  company  has  since 
pursued  without  deviation  or  faltering.  On  the  failure  of  the  Protection  in  September, 
1854,  the  Phcenix  secured  some  of  its  best  men  at  the  West  and  a  fair  share  of  its 
business.  Strengthened  by  the  profits  of  the  first  year  the  president  and  secretary 
determined  not  to  confine  operations  to  our  cities  or  older  settlements,  but  to  occupy 
as  fully  as  possible  the  long  fringes  of  our  frontiers.  The  Phcenix  took  the  lead  in 
planting  agencies  up  and  down  the  Pacific  coast.  Till  then  merchants  and  others 
even  hundreds  of  miles  distant  were  compelled  to  procure  insurance  through  their 
correspondents  in  San  Francisco.  The  brothers  R.  H.  and  H.  IM.  Magill  were 
speciallv  active  in  pre-empting  territory  on  both  sides  of  the  Rocky  IMountains. 

L^ulike  its  elder  brothers,  the  Hartford  and  yEtna,  the  Phcenix  did  not  pass 
through  a  prolonged  period  of  infancy,  but  by  a  few  stalwart  bounds  leaped  into  the 
strength  and  responsibilities  of  manhood.  On  the  15th  of  June,  1S55,  a  dividend  of 
$20,000  was  endorsed  on  the  stock-notes,  and  six  months  later  a  second  ot  equal 
amount  was  similarly  applied. 

But  the  exigencies  of  the  situation  did  not  permit  the  delay  required  to  pay  the 
stock- notes  out  of  profits  even  at  the  rate  of  ten  per  cent,  semi-annually.  Numerous 
failures  among  fire  insurance  companies  gave  rise  in  various  quarters  to  more  strin- 
gent legislation,  and  several  of  the  states  passed  laws  permitting  only  those  whose 


42  INSURANCE   IN   CONNECTICUT. 

capitals  were  fully  paid  in  cash  to  do  business  Avithin  their  borders.  Accordingly,  on 
the  25th  of  February,  1856,  the  directors  voted  to  call  in  the  remaining  seventy  per 
cent.,  and  by  the  28th  of  March  the  money  was  all  in  the  treasury. 

Having  obtained  legislative  permission,  the  capital  was  increased  to  $400,000, 
in  June,  1859,  one-half  contributed  from  profits  and  one-half  called  in  cash.  It  was 
again  increased  in  1864  to  $600,000  by  an  issue  of  new  shares  at  par. 

Mr.  Loomis  passed  away  August  23,  1863,  beloved  by  his  associates  and  highly 
respected  by  the  commimity.  He  was  a  skillful  underwriter,  versed  in  the  intricacies 
of  the  profession,  cautious  yet  bold,  careful  in  forming  plans,  but  vigorous  in  push- 
ing them.  He  was  an  admirable  correspondent,  and  if  occasion  required  could 
discipline  an  agent  so  gently  and  dexterously  that  the  victim  often  took  the  lesson 
with  pleasure  as  well  as  profit. 

August  27,  1863,  Mr.  Kellogg  was  elected  president  and  William  B.  Clark 
secretary.  In  1867  Mr.  Clark  went  to  the  yEtna,  and  was  succeeded,  December  ist, 
by  D.  W.  C.  Skilton.  The  same  day  George  H.  Burdick  was  elected  assistant 
secretary.     Asa  W.  Jillson  was  made  vice-president  in  April,  1864. 

In  1871  the  Phoenix  had  accumulated  over  $1,900,000  of  solid  assets,  which 
enabled  it  to  pay  in  full  at  Chicago  losses,  under  two  hundred  and  eighty  policies, 
amounting  to  ^937,219.23.  At  the  request  of  President  Kellogg,  Marshall  Jewell,  a 
large  stockholder  and  a  director,  happening  to  be  in  Detroit  at  the  time,  hurried 
thither  to  look  after  the  interests  of  the  company.  A  feeling  of  despair  pervaded 
the  city.  Thousands  of  homeless  people  were  encamped  on  the  outskirts,  without 
money,  withovit  hope,  and  almost  without  clothing  and  food.  In  a  calamity  so 
unlooked  for  and  so  overwhelming,  and  hence  so  far  removed  from  the  hazards  con- 
templated in  the  business  of  underwriting,  the  sufferers  believed  their  policies  to  be 
nearly  or  quite  worthless.  Press  dispatches,  laden  with  painful  rumors,  deepened 
the  despondency. 

On  the  morning  of  October  13th  Governor  Jewell  stood  on  the  banks  of  the 
river  overlooking  three  thousand  flame-swept  acres  from  which  a  mighty  city  had 
vanished.  Around  was  a  surging,  sullen,  half-crazed,  despairing  crowd,  which  seemed 
to  feel  that  even  the  foundations  of  the  earth  were  crumbling  with  the  destruction  of 
their  fortunes.  Aware  that  the  Phoenix  had  both  the  means  and  the  will  to  meet 
every  claim.  Governor  Jewell,  not  less  prompt  to  act  than  quick  to  see,  lost  no 
time  in  making  known  the  purpose  of  the  company.  Mounted  on  a  dry-goods  box 
with  a  smile  in  itself  a  benediction,  he  announced  that  the  Phcenix  would  pay  all 
losses  in  full,  and  off"ered  to  draw  his  check  on  the  spot  for  any  claim  approved  by 
H.  M.  Magill,  general  agent  of  the  western  department.  Shortly  policy  No.  10,752, 
for  $10,000,  was  presented  by  Isaac  C.  Day,  when,  as  director,  Mr.  Jewell  drew  on 
the  company  for  the  full  amount,  less  interest  for  two  months — the  term  allowed 
for  jDayment. 

Though  the  remarks  of  Governor  Jewell  contained  no  suggestion  of  oratorical 
display,  no  other  speech  ever  delivered  in  the  Lake  City  compressed  into  a  few  words 
so  much  cheer  and  helpfulness,  or  changed  so  quickly  and  effectively  the  temper  of  the 
people.  The  draft  bears  date  October  13,  1871.  Immediately  the  Triltit /le  drop-ped 
from  its  window  a  hugh  placard,  announcing  that  the  Phceni.x,  of  Hartford,  had 
begun  to  pay  its  losses  in  full.  As  the  news  spread  from  one  to  another,  the  multi- 
tude cheered,  and  cried,  and  laughed  by  turns.  From  overburdened  hearts  the 
vapors  began  to  roll  away,  as  even  then  clouds  of  smoke  were  drifting  from  the 
scene,  and,  as  if  her  baptismal  name  had  been  selected  in  anticipation  of  the  event, 
both  company  and  city  rose  from  the  ashes  stronger  than  before. 


NATHANIEL  H.  MORGAN. 
President  1854-55. 


SIMKON   i..  LOOMIS 
President  1855-63. 


D.  W.  C.  SK.I1.T0N, 
Presidtiit, 


J.  H.  MITCHELL. 

Vice-President.  \j| 


HENRY  KELLOGO, 
President  1363-91. 


JOHN   P..   KN(.)X. 
Assistant  Secretary. 


EDWARD  MILLIGAN, 

Secretary. 


THE   PHC^NIX  INSURANCE  COMPANY. 


INSURANCE   IN   CONNECTICUT.  43 

The  8th  and  qth  of  October,  1S71,  are  also  memorable  in  insurance  annals  on 
account  of  the  simultaneous  forest  fires  in  IMichigan  and  Wisconsin,  which  drew  from 
the  coffers  of  the  Phcenix  #50, 176.73,  making  the  total  losses  for  the  two  days 
5987,395.96,  or  one  hundred  and  sixty-four  per  cent,  on  its  capital  stock.  After 
meeting  without  delay  these  extraordinary  demands,  the  company  had  nearly  a 
million  of  assets  left,  but  to  repair  the  reserves  required  by  law,  the  capital  was 
reduced  December  i,  one-half,  to  $300,000,  and  immediately  restored  through  subscrip- 
tion of  stockholders.  Although  the  Boston  fire,  November  10,  1872,  called  for 
$385,956.18  more,  the  burden  was  met  without  assistance  from  the  shareholders. 

January  i,  1876,  the  company  had  gross  assets  of  over  $1,900,000  and  a  net  sur- 
plus of  $385,000.  Six  months  later  the  capital  was  raised  to  a  million,  an  extra 
dividend  of  fifteen  per  cent.,  or  $90,000,  having  been  applied  toward  payment  of  the 
new  issue.     In  1881  it  was  made  two  millions  by  cash  subscriptions. 

The  company  was  organized  in  a  rear  room  of  the  office  of  Wm.  H.  Imlay,  on 
the  second  floor  of  "Union  Hall,"  afterwards  demolished  to  make  place  for  the 
building  of  the  Connecticut  Mutual  Life.  For  a  few  months  the  same  room  was 
used  for  an  office,  till  in  December  quarters  were  taken  at  No.  275  Main  street,  on  the 
second  floor.  In  December,  1862,  the  office  was  moved  to  "Hill's  Block,"  No.  333 
Main  street.  To  secure  the  facilities  required  for  a  rapidly  growing  business  the  com- 
pany decided  to  build,  and  in  November,  1873,  moved  into  the  ample  quarters  which 
it  owns  as  well  as  occupies. 

From  enfeebled  health  Mr.  Jillson  resigned  in  August,  1S88,  and  died  April  21, 
1893.  Born  in  Boston  in  April,  1823,  he  spent  most  of  his  early  life  in  Willimantic, 
Conn.,  the  Jillson  family  having  been  largely  the  pioneers  in  building  up  the  manu- 
factures of  that  thriving  borough.  For  fifteen  years  from  1847  he  was  agent  for  the 
Connecticut  Mutual  Life,  and  for  two  )-ears  agent  of  the  Hartford  Fire. 

For  the  same  cause  Mr.  Kellogg  also  practically  retired  from  all  active  partici- 
pation in  the  affairs  of  the  company  in  August,  1888,  but  remained  honorary  presi- 
dent till  his  death,  Januarj'  21,  1S91.  He  was  born  of  sea- faring  stock  at  East  Hart- 
ford, September  9,  1820.  In  early  life  he  was  clerk  on  the  Vanderbilt  steamboats. 
In  1849  he  entered  the  office  of  the  Connecticut  Mutual  Life.  From  1854  his 
energies  were  devoted  to  the  company  which  he  founded  and  ardently  loved.  Active 
in  organizing  the  National  Board  of  Underwriters,  he  always  sacredlv  observed 
every  express  and  implied  obligation  which'  membership  involved.  In  the  conduct 
of  the  Phceni.x  there  was  never  the  slightest  discrepancy  between  profession  and 
practice.  When  Mr.  Kellogg  subscribed  to  an  agreement  it  was  with  the  intention 
of  keeping  it  both  in  letter  and  in  spirit.  Independent  himself,  he  liked  independ- 
ence in  others,  and  was  pleased  to  have  his  own  views  couibatted  bv  an  intelligent 
adversary.  Acting  the  part  of  a  public-spirited  citizen  he  was  connected  with 
various  enterprises,  having  held  among  other  places  the  presidency  of  the  Hartford 
Trust  Company. 

D.  W.  C.  Skilton  was  elected  vice-president  and  acting  president  August  i, 
1888,  and  retained  the  secretar\'sliip  till  September  nth,  when  George  H.  Burdick 
was  promoted  to  that  position.  Born  at  Plymouth  Hollow,  Conn.,  January  11,  1S39, 
Mr.  Skilton  came  to  Hartford  in  1S55,  and  after  a  probation  of  six  years  in  the  drj'- 
goods  trade  entered  the  office  of  the  Hartford  Fire,  October  24,  1861.  In  August, 
1862,  he  enlisted,  was  appointed  second  lieutenant,  and  at  the  expiration  of  the  term 
of  service  was  mustered  out  as  first  lieutenant,  when  he  returned  to  his  former 
place  which  had  been  retained  for  him.  Of  the  National  Board  of  Underwriters, 
Mr.  Skilton  was  three  years  secretary  ;   seven,  vice-president ;  and  three,  president. 


44  INSURANCE   IN  CONNECTICUT. 

Mr.  Skilton  has  always  been  a  firm  believer  in  the  efficacy  of  organized  effort  and 
hence  has  cheerfully  given  much  time  and  thought  to  the  upbuilding  of  the  National 
association.  He  entered  it  so  early  and  has  maintained  the  connection  so  closely 
that  nearly  every  representative  whom  in  those  days  he  was  wont  to  meet  has  passed 
away,  and  present  members,  though  no  younger  than  himself,  regard  him  as  a  veteran. 
He  Avas  selected  by  the  New  York  City  Association  of  Underwriters  to  represent  the 
Connecticut  companies  on  the  committee  which  prepared  the  standard  policy  for 
fire  insurance.     By  many  states  this  form  has  been  adopted  and  made  obligatory. 

J.  H.  Mitchell  was  elected  second  vice-president  September  ii,  1888,  and  vice- 
president  February  2,  1891  ;  Charles  E.  Galacar,  assistant  secretary  March  10,  1888, 
and  second  vice-president  February  2,  1891  ;  John  B.  Knox,  assistant  secretar}'  Octo- 
ber I.  1891. 

Up  to  January  i,  1897,  the  Phoenix  had  received  for  premiums  $65,137,672.81 
and  paid  in  losses  ^39,739,174.81,  or  by  decades  : 

PREMIUMS.  LOSSES  PAID. 

First  year,  $39.053-74 $12,745.29 

Tenth  year,  463,419.28 285,614.06 

Twentieth  year,  1,512,710.02 760,255.95 

Thirtieth  year,   2,038,470.52 1,290,20481 

Fortieth   year,    3,507,580.82  2.206,976.70 

Assets  at  the  end  of  the  first,  tenth,  twentieth,  thirtieth  and  fortieth  \-ears  were 
,$212,896.61,  $925,902.97,  $1,852,894. 12,  $4,316,957.91,  55,588,058.07  respectively,  and 
January  i,  1897,  $5,320,265.42,  with  a  net  surplu.s,  $730,5ii,57- 

George  Harrison  Burdick,  born  at  Granville,  N.  Y.,  December  17,  1841,  after  a 
partial  course  at  college,  at  the  age  of  nineteen  entered  the  office  of  the  Phcenix, 
where,  as  clerk,  assistant  secretary  and  secretary,  he  spent  the  remaining  years  of  his 
life.  He  died  suddenly  at  Heidelberg,  Germany,  July  2,  1896,  having  left  home 
about  a  month  before. 

Mr.  Galacar  resigned  in  the  fall  of  1896  to  take  the  vice-presidency  of  the 
Springfield  Fire  and  Marine.  Officers,  January  i,  1897,  were  D.  W.  C.  Skilton, 
president ;  J.  H.  Mitchell,  vice-president ;  Edward  Milligan,  secretary,  and  John  B. 
Knox,  assistant  secretar}'. 

Capt.  J.  H.  Mitchell  was  born  in  Venango  county,  Penna.  ;  served  in  the  late 
war ;  shared  in  several  battles,  including  Chancellorsville  and  Gettysburg  ;  was  after- 
wards a  merchant ;  entered  the  insurance  business  about  a  quarter  of  a  century  ago, 
first  as  local  and  later  as  special  agent  of  the  Niagara  ;  joined  the  special  corps  of  the 
Phcenix  in  1884,  and  came  to  the  home  office,  as  above  described. 

Edward  Milligan,  born  at  Haddonfield,  N.  J.,  June  i,  1862,  began  work  while  a 
boy  as  clerk  in  the  local  insurance  agency  of  Kremer  &:  Durban,  of  Philadelphia  ; 
was  later  surveyor  of  the  .Etna,  of  Hartford,  in  the  same  cit)- ;  in  November,  1888, 
became  special  of  the  Phoenix  for  the  middle  department,  and  was  elected  secretary' 
in  September,  1896. 

John  B.  Knox,  born  in  Hartford,  April  30,  1857,  after  one  5'ear  in  the  local 
insurance  agency  of  W.  F.  Rice  &  Co.,  entered  the  office  of  the  Phoenix  September 
'5)  1873,  and  having  been  clerk,  adjuster  and  special  agent  for  Western  New  Eng- 
land, was  elected  assistant  secretary  September  24,  1891. 

The  Phoenix  has  three  departments.  H.  M.  Magill  conducts  the  Western  from 
Cincinnati ;  A.  E.  Magill  the  Pacific,  from  San  Francisco ;  and  Smith  &  Tateh-,  the 
Canadian  from  ^Montreal. 


INSURANCE    IN   CONNECTICUT.  45 

THE  STATE  FIRE  INSURANCE  COMPANY  OF  NEW  HAVEN. 

The  above  company  was  incorporated  in  1855.  The  capital  stock  was  fixed  at 
not  less  than  Sioo,ooo,  with  the  privilege  of  increase  to  any  sum  not  exceeding 
$200,000.  Subscribers  were  required  to  pay  an  installment  of  ten  per  cent,  at  the 
time  of  subscribing,  and  within  sixty  days  thereafter  to  secure  the  payment  of  the 
remaining  ninety  per  cent,  either  by  mortgages  of  real  estate  or  by  endorsed  prom- 
issory notes,  payable  within  ninety  days  after  demand,  by  order  of  the  directors.  The 
board  was  also  empowered,  at  discretion,  to  require  payment  in  cash  on  the  ninety 
per  cent,  thus  secured. 

For  about  two  years  the  charter  was  unused.  In  the  summer  of  1857  the  com- 
pany came  before  the  public  by  opening  an  office  in  New  Haven.  Nothing  in  its 
records  throws  any  light  upon  the  time,  place,  or  manner  of  organization.  It  started 
with  a  nominal  capital  of  $150,000,  all  held  by  New  York  parties.  This  was  made 
up  of  mortgages,  of  a  character  to  be  described  hereafter,  to  the  extent  of  $102,500, 
and  of  endorsed  promissory-  notes  amounting  to  $47,500.  Thus  far  not  a  dollar  in 
cash  had  found  its  way  into  the  treasury  of  the  concern,  yet  certificates  for  full  paid 
stock  were  issued  to  the  manipulators. 

In  November,  1857,  the  directors  voted  to  increase  the  capital  to  $200,000,  and 
appointed  a  committee  to  attend  to  the  matter,  which  reported  on  the  8th  of  Febru- 
ary- following,  that  the  additional  capital  was  all  received  and  in  possession  of  the 
company. 

Meanwhile,  at  a  meeting  of  the  directors  held  January  5,  1858,  a  committee,  of 
which  Benjamin  Noyes  was  the  active  spirit,  was  appointed  to  dispose  of  fresh  stock 
to  the  extent  of  $47,500,  to  take  the  place  of  a  like  amount  embraced  in  the  original 
oiitput,  and  represented  in  the  assets  by  promissory'  notes.  Through  some  under- 
standing with  the  New  York  parties,  their  certificates  were  returned  in  exchange  for 
their  personal  obligations.  Noyes  presented  the  prospects  of  the  enteqjrise  in  such  a 
rosy  light  that  sundry  persons  were  induced  to  come  into  it  in  a  somewhat  vague  and 
shadowy  way.  Under  the  proposed  arrangement  new  subscribers  were  to  draw 
double  income — dividends  on  the  insurance  stock  issued  to  them  and  also  on  the 
collaterals  of  which  they  still  retained  ownership,  though  apparently  turning  them  into 
the  treasury  in  payment  of  their  subscriptions. 

On  the  1st  of  April,  1858,  a  single  share  of  stock  each  was  issued  without  con- 
sideration, to  eleven  citizens  of  New  Haven  to  qualify  thein  to  act  as  directors.  Most 
of  the  gentlemen  singled  out  for  the  distinction  were  not  notified  by  the  officers,  and 
perhaps  some  first  heard  of  it  when  threatened  with  suits.  Early  in  1858  the  com- 
pany advertised  for  btisiness  in  the  local  papers  and  in  printed  circulars. 

Having  at  length  started  upon  its  short  but  stormy  career  the  company  applied 
for  a  license  to  do  business  in  Massachusetts,  which  was  granted  April  9,  i860. 

Its  financial  statement  was  presented  to  the  commissioners  by  Mr.  Augustus  O. 
Brewster,  the  first  incumbent  of  the  newly  created  office,  and  a  relative  of  a  leading 
director.  On  a  capital  of  $200,000  the  gross  assets  were  set  down  at  $250,795,  and 
the  net  surplus  at  $8,081.  The  list  of  securities  looked  irreproachable,  including 
among  the  items  bank  and  railway  stocks  and  bonds  exceeding  $75,000,  issued  by 
institutions  of  well-known  strength.  Loans  on  mortgages  of  real  estate  reached 
$138, 100,  and  were  said  by  I\Ir.  Brewster  to  be  on  city  property  in  New  Haven  and 
New  York.  With  childlike  confidence  in  human  nature  he  had,  without  due 
inquin,-,  accepted  as  true  the  representations  made  by  Benjamin  Noyes,  both  a 
director  and  a  kinsman.     The  statement  was  sworn  to  before  a  notary  by  John  B. 


46  INSURANCE   IN  CONNECTICUT. 

Robertson,  president,  and  G.  Farnham  Stevens,  secretary.  Of  the  twenty  directors, 
seventeen  resided  in  New  Haven,  several  of  whom  were  obviously  selected,  not  to 
share  in  knowlege  or  conduct  of  the  business,  but  to  impart  to  it  by  reflected  light  an 
air  of  respectability. 

The  statement  for  November  i,  iS6o,  seemed  to  indicate  marked  improvement 
during  the  inter\'al  in  the  condition  of  the  company,  gross  assets  having  increased 
to  $278,41 1.92,  and  the  net  surplus  to  $24,313. 26. 

In  June,  1861,  Secretary  Stevens  suddenly  disappeared  from  New  Haven.  The 
news  did  not  reach  the  office  of  the  insurance  commissioner  in  Boston,  through  the 
loudness  of  the  local  outcry,  btit  came  several  weeks  later  in  letters  from  claimants, 
unable  to  collect  losses  under  policies  of  the  company.  Mr.  Elizur  Wright,  then 
commissioner  for  Massachusetts,  lost  no  time  in  hurr\'ing  to  the  home  office  in  New 
Haven.  He  was  there  told  by  the  managing  directors  that  heavy  losses  in  New  York 
had  absorbed  the  most  available  of  the  assets.  He  learned,  too,  that  the  $138,100 
of  mortgages  did  not  rest  on  city  property,  but  on  vast  tracts  of  wild  lands  in  northern 
New  York.  Collaterals  deposited  to  secure  notes  of  stockholders  to  the  amount  of 
$30,000  were  said  to  have  disappeared  with  the  lost  secretary.  With  regard  to  other 
securities,  Mr.  Wright  was  assured  that  they  were  kept  in  bank  and  were  all  right. 
Promise  was  also  made  that  the  notes  given  by  shareholders  should  be  collected  at 
once,  and  that  the  company  would  soon  settle  in  full  all  claims  in  Massachusetts. 

Hoodwinked,  as  Mr.  Brewster  had  been  before  him,  Mr.  Wright  proceeded  on  to 
New  York  city  with  his  suspicions  completely  allayed.  On  the  return  trip,  as  it  was 
a  warm  summer  day,  he  decided  to  take  the  afternoon  boat  to  New  Haven.  Here, 
by  mere  accident,  he  happened  to  overhear  the  conversation  of  a  little  group  of  fel- 
low-passengers seated  near.  The  line  of  talk  ran  along  the  shady  side  of  things,  and 
they  seemed  particularly  amused  at  the  success  of  a  "job  "  put  up  to  tide  the  "State 
Fire"  over  a  crisis  in  its  affiiirs.  A  prophetic  perception  of  the  true  situation 
dawned  upon  him.  Visiting  the  local  corporations  whose  stocks  the  insurance  com- 
pany had  professed  to  own,  he  learned  that  at  least  $50,000  of  the  list  which 
had  been  included  in  the  sworn  statements  as  assets  never  belonged  to  the  company, 
having  been  hired  for  show  occasions,  and  to  swear  by.  Four  per  cent. ,  or  $2,000 
a  year,  were  paid  to  the  lenders.  In  most  cases  certificates  were  made  directly  to  the 
company  to  heighten  the  deception.  The  banks  were  told  that  the  shares  were 
wanted  as  a  "temporar)- guaranty,"  or  "  preferred  stock  " — phrases  not  impleasant  to 
the  ear,  and  helping  to  hide  the  enormity  of  the  cheat  behind  a  veil  of  mystery. 

Detesting  fraud  and  falsehood  in  every  form,  Mr.  Wright  was  speciall\-  incensed 
at  the  deception  practiced  upon  him  as  commissioner.  He  not  only  denounced  the 
officers  as  rascals — a  position  which  few  were  inclined  to  dispute — but  also  jumped 
to  the  conclusion  that  all  the  directors  nmst  have  known  about  the  crookedness,  and 
hence  were  little  less  guilty.  Accordingly  he  laid  the  facts  before  Hon.  E.  K.  Foster, 
state's  attorney  for  the  county,  asking  that  the  officers  be  prosecuted  criminally.  He 
also  employed  counsel  to  enter  civil  suits  against  the  directors  for  the  losses  and  un- 
earned premiums  due  to  citizens  of  Massachusetts. 

On  the  15th  of  November,  1861,  Mr.  Foster  reported  that  he  was  not  altogether 
satisfied  that  criminal  proceedings  could  be  instituted  successfully,  though  there  was 
enough  "to  justify  action,"  should  it  be  thought  advisable  to  proceed  at  any  time. 
A  few  weeks  later  he  wrote  to  the  commissioner  thus  : 

New  H.-wen,  December  9,  1861. 
Dear  Sir, — An  examination  of  our  law  by  no  means  satisfies  me  that  I  can  successfully 
prosecute  the  officers  of  the  vState  Fire  Insurance  Company  ;  and,  indeed,  it  determines  ray  mind 


INSURANCE   IN   CONNECTICUT.  47 

quite  othen\-ise  except  as  to  the  secretary,  Farnliaiu  vStevens,  who  has  gone  to  parts  unknown. 
The  reason  for  this  conclusion  I  will  state  to  you  the  first  time  I  meet  you. 

Respectfully  your.s, 

E.  K.  Foster. 

For  several  years  the  commissioner  continued  to  press  the  several  suits.  He 
placed  the  case  against  the  directors  in  the  hands  of  Tilton  E.  Doolittle,  Esq.,  and 
the  following  letters  will  indicate  the  drift  of  affairs: 

Office  of  Insurance  Commissioners,  Boston,  January  13,  1S63. 
Tilton  E.  Doolittle,  Esq.,  New  Haven,  Conn.: 

Dear  Sir, — Will  you  be  so  good  as  to  inform  me  by  letter  what  progress  has  been  made  in 
the  suit  I  authorized  you  to  bring  against  the  directors  of  the  State  Fire  Insurance  Company,  and 
what  obstacles,  if  any,  stand  in  its  way?  I  am  as  desirous  as  ever  to  know  whether  there  is  law 
in  Connecticut  to  hold  those  gentlemen  to  the  oaths,  words  and  figures  bv  which  they  got  busi- 
ness in  Massachusetts,  and  the  suit  shall  not  fail  through  any  failure  on  my  part. 

Very  respectfully  3'ours, 

Elizur  Wright. 

In  his  reply,  dated  January  16,  Mr.  Doolittle  wrote  that  the  case  would  be  tried 
at  the  first  jury  term  of  court,  either  in  ]\Iarch  or  October,  and  that  no  obstacle  stood 
in  the  way. 

Nearly  two  years  later,  however,  having  submitted  terms  for  the  compromise  of 
a  Massachusetts  case,  which  were  not  accepted,  December  28,  1864,  he  wrote  as  follows: 

"The  most  weighty-  reason  in  my  mind,  if  not  the  most  obvious  one,  wh}-  we  should  not  get 
a  verdict  is  the  high  standing  and  political  influence  of  the  defendants.  While  I  do  not  doubt 
the  law,  I  have  but  little  faith  that  a  jurj'  will  ever  agree  upon  a  verdict  against  these  defendants. 
You  may  say  that  they  ought  to,  and  all  that  sort  of  thing,  but  the  mischief  of  it  is,  that  the  jury 
have  the  power  and  they  won't." 

Mr.  Doolittle's  conclusions  were  certainly  correct.  Several  of  the  directors 
were  men  of  very  high  character.  Their  names  were  tised  without  their  consent, 
unless  consent  is  implied  from  failure  to  repudiate  the  connection  by  public  notice. 
They  knew  nothing  of  the  affairs  of  the  concern,  nor  would  the  managers  under  anv 
circumstances  have  disclosed  to  them  its  guilty  secrets.  If  the  contention  of  the 
commissioner  prevailed,  that  directors  of  companies  should  be  held  pecuniarily 
responsible  for  the  correctness  of  statements  sworn  toby  executive  officers,  in  a  case 
like  this  a  person  for  simply  neglecting  to  read  advertisements  in  newspapers,  or  for 
failure  to  inspect  the  literature  put  forth  to  win  business,  might  find  himself  exposed 
to  heavy  penalties. 

Benjamin  Noyes  was  elected  secretary  August  20,  1861.  On  the  2nd  of  No- 
vember following,  the  company  made  a  voluntary  assignment  for  the  benefit  of 
creditors,  and  Frederick  W.  Northrop  was  subsequenth-  appointed  trustee  in  insol- 
vency. As  a  test  case  he  brought  stiit  against  Cornelius  S.  Bushnell,  a  director,  for 
the  balance  due  on  a  stock-note,  and  obtained  judgment  for  the  amount.  It  was  shown 
that  Bushnell  was  elected  without  his  knowledge  or  consent.  It  was  not  shown  that 
he  had  taken  any  part  in  the  direction  of  the  company.  The  court  held  that  as  he  had 
not  promptly  resigned  the  position  and  repudiated  the  contract  into  which  he  had  been 
entrapped,  but  permitted  his  name  to  remain  for  two  )-ears  before  the  public  as  one 
of  the  directors,  and  had  thus  contributed  to  win  for  the  company  public  trust  and 
confidence,  he  could  not  set  up  as  a  defense  against  creditors  a  previous  compromise 
and  settlement  with  Benjamin  Noyes,  although  the  latter  had  been  authorized  bv 
the  board  to  settle  claims  and  execute  instruments  of  release.     Mr.  Bushnell,  after 


48  INSURANCE   IN   CONNECTICUT. 

the  decision,  paid  the  judgment  in  full.  Others,  not  directors,  were  then  sued  on 
their  stock-notes,  and  paid  more  or  less  to  get  out  of  the  scrape. 

The  mortgages  on  lands  in  northern  New  York,  that  constituted  over  one-half 
of  the  capital,  proved  worse  than  worthless,  for  when  sold  in  foreclosure  the  proceeds 
were  insufficient  to  pay  the  costs. 

When  the  appraisers  of  the  insolvent  estate  returned  to  the  court  in  January, 
1862,  a  sworn  inventory  of  assets,  the  $278,41 1.92  of  November  i,  i860,  had  dwindled 
to  a  beggarly  $83.49. 

The  document  is  a  curiosity  in  the  literature  of  insurance.  Falstaff's  half-penny 
worth  of  bread  to  an  "intolerable  deal  of  sack"  would  pass  for  solid  diet  when  com- 
pared with  the  assumption  of  several  millions  of  risks  on  assets  of  $83.49  invested 
as  shown. 

"  To  the  Probate  Court  for  the  District  of  New  Haven. 

Estate  of  State  Fire  Insurance  Company  of  New  Haven  in  said  district  insolvent  debtor. 

The  subscribers  appointed  appraisers  on  said  estate,  having  been  legally  sworn,  have 
appraised  all  of  said  estate,  both  real  and  personal,  according  to  its  value,  and  have  assisted  in 
making  a  true  and  perfect  inventory  thereof  as  follows,  viz. : 

6  arm  chairs  g6.oo,  i  spittoon  .25,  i  pail  .05,  i  pair  of  tongs  .10 $  6.40 

I  wash  stand  .50,  i  basket  .25,  i  card  rack  .50 1.25 

I  enveloperack  .62,  one  twine  box  .13,  I  Post  Office  box  .25 i.oo 

Two  tin  boxes  $1.00,  wetting  machine  .25,  one  small  press  .50 1.75 

Old  paper  $1.00,  blank  books  $2.00,  one  stove  and  pipe  gio.oo i3-oo 

One  map  of  United  States  $2.50,  one  map  of  Connecticut  $2.00 4.50 

One  map  of  New  Haven  $2.50,  one  office  desk  and  fixtures  $10 12.50 

One  long  counter  and  standing  desk  $25.00,  pens  .25 25.25 

Lot  of  writing  paper  $1.00,  one  picture,  basin  and  tumblers  .37 1.37 

Duster  .05,  postage  scales  .75,  gas  fixtures  and  shades  $8.75 9.55 

Lot  of  curtains  and  fixtures  $2.00,  three  portfolios  .87 2.87 

Paper  clasps  .50,  lot  of  envelopes  $1.00,  one  ink  stand  gi. 00 2.50 

One  broom  .05,  step  ladder  Si.50 1.55 

$83.49 
W11.LIS  Bristol,      |  Appraisers. 
Alfred  Daggett,  j     ^^ 
F.  W.  Northrop,  Trustee. 
Received,  sworn  to  and  accepted  January  17,  1862. 

Luzon  B.  Morris, 

Judge." 

The  thought  of  the  projectors  is  easily  divined.  If  small  companies  elsewhere, 
with  a  small  percentage  of  the  nominal  capital  paid  in  cash,  had  attained  conspicuous 
success,  why  could  not  their  venture,  without  any  cash  whatever,  meet  with  similar 
good  fortune?  Fraud  and  perjury  certainly  did  not  stand  in  the  way.  Had  luck 
been  different,  the  weakness  of  the  beginnings  might  never  have  been  suspected  by 
the  public.     But  losses  in  excess  of  premiums  killed  the  experiment  in  the  bud. 


INSURANCE   IN   CONNECTICUT.  4!i 

CHAPTER    Y. 
INS URANCE    1 X    C O NNE  CTICU T—  Continued. 

THE   MERCHANTS'    AND  THE   NATIONAL   (hARTFORD). 

LTHOUGH  distinct,  the  above  corporations  are  so  closely  identified  in  the 
line  of  succession,  that  an  account  of  both  can  best  be  given  in  a  contin- 
uous story.  The  Merchants'  was  chartered  in  1857,  with  a  capital  to  be 
fixed  at  pleasure  between  the  extreme  limits  of  $200,000  and  $500,000. 
In  the  act  the  old  formula  was  pursued  of  requiring  a  cash  payment  of  10 
per  cent.,  and  permitting  the  other  90  per  cent,  to  be  secured  by  stock  notes.  A 
book  for  subsciiptions  was  opened  July  2,  1857.  Such  was  the  eagerness  of  the  pub- 
lic to  take  a  hand  in  the  venture,  that  five  thousand  five  hundred  and  sixteen 
shares  ($55 1,600)  were  at  once  applied  for.  Two  days  later  the  corporators  met  and 
scaled  the  subscriptions  to  two  thousand  shares  ($200,000).  On  the  7th  the  follov/- 
ing  board  of  directors  was  elected  :  Mark  Howard,  Samuel  Woodruff,  James  Bolter, 
Ebenezer  Roberts,  Guy  R.  Phelps,  Timothy  Sheldon,  James  P.  Foster,  \V.  H.  D.  Cal- 
lender,  Sidney  A.  White,  Charles  T.  Hillyer,  Elijah  H.  Owen,  Homer  Blanchard, 
Richard  D.  Hubbard,  Matthew  M.  Merriman  and  William  L.  Collins.  The  same 
day  Mark  Howard  was  elected  president,  and  E.  Thomas  Lobdell  secretary. 

Mr.  Howard,  traveling  agent  of  the  Protection  till  he  gave  up  the  position  after 
striving  earnestly  but  in  vain  to  reform  its  methods,  had  been  a  close  observer  of  the 
mistakes  that  led  to  its  downfall.  He  adopted  and  pursued  a  widely  diflferent  policy. 
While  energy  was  put  forth  in  planting  agencies  and  soliciting  business,  care  was 
even,-where  taken  to  confine  risks  to  the  less  hazardous  classes  of  property.  Mr. 
Howard  impressed  upon  his  associates  the  theory'  that  better  results  in  the  long  nm 
were  likely  to  follow  from  carefully-selected  lines  than  from  a  great  volume  of  pre- 
miums. 

The  l\Ierchants'  was  the  first  company  in  Connecticut  to  repudiate  the  custom 
of  building  on  a  foundation  of  stock  notes — a  privilege  long  embraced  in  even,- 
charter  granted  by  the  Legislature.  Within  five  weeks  after  organization,  the  direc- 
tors voted  a  cash  installment  of  40  per  cent.  Similar  calls  followed  at  convenient 
intervals  till  the  shares  were  fully  paid. 

For  a  long  period  the  record  tells  a  stor\'  of  uniform  prosperity  enlivened  by  no 
dramatic  incident.  Directors  almost  ceased  to  attend  meetings.  It  was  even  hard 
to  get  a  quorum  to  vote  dividends,  which  were  paid  at  the  rate  of  5,  6  and  8  per 
cent,  semi-annually,  till  July,  1869,  when  the  rate  was  raised  to  10,  or  20  per  cent,  a 
year. 

Mr.  Lobdell  died  in  November,  1870,  and  was  succeeded,  January  23,  1871,  by 
James  Nichols,  general  agent  of  the  company. 

At  the  annual  meeting  in  July,  1 871,  assets  were  reported  to  be  $580,270.71. 
Shares  brought  $250.  Viewed  in  the  light  of  experience,  the  position  of  the  Mer- 
chants' was  supposed  to  be  impregnable. 

In  October  came  the  Chicago  fire,  with  losses  of  $1,075,643 — over  five  times  the 
amount  of  its  capital,  and  nearly  half  a  million  in  excess  of  its  entire  assets.  Pay- 
ment in  full  was  clearly  impossible.  The  ^Merchants'  held  a  number  of  mortgages 
on  propetrv  in  the  burned  district,  which  not  only  lessened  available  resources,  but 
4 


50  INSURANCE   IN  CONNECTICUT. 

increased  the  difficulty  of  effecting  settlements.  Probably  the  best  thing  for  all  par- 
ties would  have  been  a  compromise.  All  but  a  small  majority  of  the  sufferers  were 
entirely  willing  to  accept  the  terms  offered  by  the  company — terms  which  would 
have  justified  the  managers  in  calling  in  fresh  capital,  and  thus  saving  it  from 
destruction.  A  few  held  off,  hoping  by  obstinacj'  to  secure  larger  dividends  than 
their  more  considerate  neighbors.  Mr.  Howard,  with  the  strong  support  of  Mr. 
Nichols,  took  the  ground  that  all  should  be  treated  precisely  alike.  Both  had 
promised  parties  who  signed  the  compromise  that,  w-hether  it  succeeded  or  failed,  they 
should  receive  a^  much  as  any  other  creditor.  With  them,  rising  above  every  con- 
sideration of  expediency,  a  promise  was  sacred  and  inviolable.  Thwarted  in  their 
efforts  to  secure  unanimous  consent  to  the  terms  of  settlement  by  the  attitude  of  a 
mere  handful  of  policy-holders,  the  directors,  without  a  dissenting  voice,  voted  to 
distribute  the  entire  assets  of  the  company /ri?  rfl/a  among  creditors.  Everything 
down  to  the  smallest  article  of  office  furniture  was  sold,  and  the  proceeds  thus 
applied.  Those  who  had  ahead)'  signed  full  releases  received  a  small  additional 
dividend.  But  a  company  of  stainless  record  and  brilliant  promise  was  forced  out 
of  existence. 

An  act  had  been  jDassed  in  1S69  incorporating  the  National  Fire  Insurance  Com- 
l^any,  but  at  the  time  of  the  Chicago  fire  no  steps  had  been  taken  toward  making  use 
of  the  franchise.  It  was  now  decided  to  continue  the  business  of  the  Merchants' 
through  an  entirely  new  compau}-  organized  under  this  charter.  Accordingly,  books 
were  opened  November  14,  1871,  and  when  closed  November  20th,  six  thousand  and 
eighty  shares  had  been  applied  for.  General  William  B.  Franklin,  James  G.  Batter- 
son  and  Richard  D.  Hubbard,  corporators,  named  in  the  charter  to  receive  subscrip- 
tions, scaled  the  allotments  down  to  a  total  of  two  thousand. 

At  the  first  meeting  of  stockholders,  held  November  27th,  it  was  voted  to  increase 
the  capital  from  ;^200,ooo  to  ;S50o,ooo  and  the  following  board  of  directors  was  elected, 
viz:  Mark  Howard,  E.  H.  Owen,  Richard  D.  Hubbard,  J.  P.  Foster,  E.  N.  Welch, 
James  Bolter,  Ebenezer  Roberts,  William  B.  Franklin,  Homer  Blanchard,  Wareham 
Griswold,  J.  F.  Judd,  D.  F.  Seymour,  Frank  Cheney,  Harrison  B.  Freeman,  William 
S.  Pierson,  Timothy  Sheldon  and  William  H.  Lee. 

The  same  day  Mark  Howard  '^\'as  elected  president  and  James  Nichols  secretary. 

Our  familiar  acquaintance,  the  stock  note,  played  no  part  in  the  organization  of 
the  National,  the  entire  capital  having  been  paid  in  cash. 

During  the  first  eleven  months  of  business  the  National  increased  its  assets  to 
$623,000.  Then  followed  the  Boston  fire  with  losses  of  $161,000.  To  meet  the 
emergency  the  capital  was  reduced  to  $350,000,  and  at  once  restored  to  the  former 
figures  by  subscriptions  of  the  shareholders.  From  that  day  on  its  success  and 
growth  have  been  iminterrupted.  In  1878  the  contribution  for  Boston  was  in  part 
returned  in  a  stock  dividend  of  $100,000  from  net  profits,  and  in  July,  1881,  the 
capital  was  further  increased  to  $  1,000,000  by  cash  subscriptions. 

President  Howard  died  January  24,  1 887.  He  was  born  in  Loose,  county  of  Kent, 
England,  May  27,  1S17,  and  came  to  America  with  his  father  and  one  brother  in  1831. 
The  three  proceeded  to  Ann  Arbor  in  the  territory  of  Michigan,  where  four  weeks 
later  the  father  died.  When  seventeen  j'ears  old  Mark  established  a  Whig  paper  at 
Ann  Arbor.  While  still  a  minor  he  was  appointed  clerk  of  one  of  the  branches  of 
the  legislature  and  held  the  place  for  two  terms.  As  local  agent  for  the  Protection 
Insurance  Company  he  exhibited  such  admirable  qualities  that  in  1846  he  was  made 
its  special  agent  with  broad  powers  of  supervision  and  appointment.  It  is  claimed 
that  he  was  the  first  person  in  the  United  States  to  be  employed  exclusively  in  the 


MARK  HOW AKD, 
presWent  1871-87 


JAMES  NICHOLS. 
Presideiu. 


Assistanl  Secreuw 


NATIONAL  FIRE  INSUKANCb  COMPANY  OF  HARTFORD. 


INSURANCE   IN  CONNECTICUT.  51 

field.  He  now  made  his  residence  in  Hartford,  but  traveled  tip  and  down  our 
frontiers  from  the  lakes  to  the  Gulf  of  Mexico  by  stage  and  steamer.  In  the  story 
of  the  Protection  we  have  told  of  his  visit  to  St.  Louis  in  the  height  of  the  cholera 
ei)ideniic  of  1849,  ^'^'^  "^  ^"■''  heroism  in  facing  perils  from  which  old  residents  fled 
in  panic.  That  one  act  brought  untold  credit  and  business  to  Hartford  insurance 
interests. 

The  instniction  book  which  he  prepared  for  the  Protection  about  184S  marks 
an  epoch  in  the  literature  of  the  science.  Speaking  of  it  Charles  B.  Whiting,  presi- 
dent of  the  Orient,  says  : — 

"  It  was  much  the  most  elaborate  of  any  before  issued  and  is  the  basis  for  all  our  modern 
books.  Here  appear  for  the  first  time  the  definitions  of  insurance  terms.  It  treats  of  the  'Moral 
Hazard,'  the  '  Local  and  Internal  Hazard,'  and  gives  full  instruction  for  the  inspection  of  risks. 
Here  also  appear  standards  for  the  rating  of  a  large  number  of  risks  ;  forms  of  policy  for  a  great 
many  hazards,  and  for  the  first  time  the  three-quarter  value  clatise.  This  book  was  the  greatest 
contribution  to  insurance  literature  that  had  been  issued  up  to  that  time,  and  very  far  in  advance 
of  any  of  the  others.  The  definitions  are  those  in  vogue  to-day,  and  there  has  been  but  little  if 
anv  improvement  on  the  forms  there  put  forth.  Subsequent  books  are  but  an  enlargement  of 
this.     The  text  for  them  all  is  found  within  its  covers." 

He  was  appointed  b}'  President  Lincoln  first  internal  revenue  collector  for  Con- 
necticut. He  was  so  fair  that  appeals  were  seldom  taken  from  his  rulings,  several  of 
■which  became  incorporated  in  the  system. 

Mr.  Howard  was  a  man  of  lofty  ideals.  The  inspiration  of  high  aims  lifted  him 
out  of  the  atmosphere  of  the  common  place.  Wherever  the  battle  for  principle  raged 
hardest  he  was  sure  to  be  found  taking  blows  if  need  be,  but  giving  sturdy  ones  in 
return. 

James  Nichols,  long  and  intimately  associated  with  Mr.  Howard,  was  elected 
president  February  9,  1S87.  He  was  born  December  25,  1830,  at  Weston,  Conn. 
Admitted  to  the  bar  in  1854,  he  settled  a  year  or  two  later  in  Hartford,  having  been 
made  assistant  clerk  of  the  Superior  Court  of  the  county.  In  1861,  when  the  dis- 
trict embraced  seven  towns,  he  was  elected  judge  of  probate,  a  position  for  which  he 
was  peculiarily  fitted.  Attracted  by  business  connections  into  the  field  of  insurance, 
he  became  adjuster  and  special  agent  of  the  Merchants'  in  1867,  and  three  years  later 
its  secretary.  Anxious  as  the  executive  officers  were  to  save  the  charter  of  the  com- 
pany after  the  Chicago  fire,  both  agreed  that  the  end  must  be  reached  if  at  all  by 
treating  the  strong  and  the  weak  precisely  alike.  Hints  from  rich  claimants  eager 
for  an  luidue  share  fell  upon  deaf  ears.  The  result  has  been  told.  Mr.  Howard  was 
so  exhausted  by  the  vexations  and  labors  in  which  both  equally  shared  that  he  fell 
ill  and  went  abroad  to  find  rest.  He  was  still  in  Europe  at  the  time  of  the  Boston 
fire,  in  October,  1872.  Mr.  Nichols  was  then  in  charge,  and  the  gap  made  in  the 
assets  was  filled  under  his  direction.  Differing  in  temperaments,. Mr.  Howard  and  his 
chosen  lieutenants  were  alike  in  inflexible  adherence  to  do  what  they  believed  to  be 
right. 

In  April,  1887,  Ellis  G.  Richards,  of  Boston,  an  experienced  imderwriter, 
was  elected  secretar}-.  In  ilarch,  1891,  Benjamin  R.  Stillman  was  elected  assistant 
secretar}'. 

In  January,  1888,  the  National  reinsured  the  Washington  Fire  and  Marine 
Insurance  Company  of  Boston  on  all  their  business  throughout  the  United  States, 
except  in  Connecticut,  New  York,  Penns)-lvania,  New  Jersey,  Delaware,  and  Mary- 
land ;  established  a  western  department  at  Chicago,  and  reorganized  and  enlarged 
the  Pacific  department,  with  headquarters  at  San  Francisco.     The  transaction  added 


52  INSURANCE   IN   CONNECTICUT. 

to  the  company  a  large  amount  of  good  business,  guarantying  a  large  and  permanent 
increase  of  premium  receipts. 

In  the  fall  of  1893  at  a  cost  of  nearly  ^200,000  the  company  completed  its  hand- 
some home  office  upon  the  corner  of  Pearl  and  Lewis  streets.  It  has  a  frontage  of 
seventy-one  with  a  depth  of  one  hundred  and  thirty-four  feet,  and  comprises  a  main 
building,  foi-ty-nine  by  seventy-one  feet,  three  stories  high,  and  a  large  wing  in  the 
rear,  flanked  on  the  Lewis  street  side  by  a  two-story  annex.  The  building  is  of  fire- 
proof construction  with  floors  of  iron  beams  and  tile  arches  and  with  stainvays  and 
roof  of  iron. 

During  the  life  of  President  Howard  the  growth  of  the  National  was  slow. 
His  successor,  supported  by  able  assistants,  has  pursued  a  much  more  aggressive 
policy  with  eminently  satisfactory  results.  Net  premium  receipts  increased  from 
^521, 960  in  1886,  to  $2,254,240  in  1896,  with  an  average  loss  ratio  for  the  period  of 
52.4;  the  reinsurance  reser\-e  from  $341,677  to  $1,806,990;  the  gross  assets  from 
$1,958, 506  to  $4, 120, 260.  During  1896  net  surplus  increased  $324,382  to  $1,037, - 
580.  Meanwhile  annual  dividends  have  never  fallen  below  ten  per  cent.,  and  have 
alwavs  been  paid  exclusively  out  of  income  from  assets. 

Ellis  Gray  Richards,  vice-president  and  secretary,  born  at  Worcester,  Mass., 
December  16,  1848,  left  school  for  business  at  the  age  of  seventeen,  and  at  twenty-one 
was  head  bookkeeper  for  a  large  iron  manufacturing  establishment.  The  concern 
was  so  disabled  by  the  panic  of  1873,  that  the  next  year  he  took  a  clerkship  in  the 
Boston  office  of  the  Commercial  Union  Assurance  Company.  Within  a  few  months 
he  was  made  secretary  and  surveyor  of  the  Worcester  County  Board  of  Underwriters, 
and  in  May,  1877,  special  agent  of  the  Royal  and  the  Pennsylvania  for  service  in 
New  England.  In  May,  1881,  he  accepted  a  similar  position  in  the  same  field  with 
enlarged  responsibilities  from  the  Queen  Insurance  Company,  taking  an  active  part 
two  years  later  in  organizing  the  New  England  Insurance  Exchange.  In  the  changes 
that  followed  the  death  of  president  Howard,  he  accepted  the  secretaryship  of  the 
National  in  April,  1887,  and  was  elected  vice-president  in  December,  1896. 

Benjamin  Rhodes  Stillman,  assistant  secretary,  born  at  Adams,  N.  Y.,  March 
31,  1852,  after  preparing  for  Hamilton  College,  changed  his  plans  and  entered  the 
office  of  Mollison  «&.  Hastings,  merchants,  millers  and  insurance  agents,  where  soon 
his  time  was  wholly  devoted  to  the  last-named  branch.  Later  he  served  at  the  home 
office  of  the  Watertown  Fire  and  the  Sun,  till  appointed  general  agent  of  the 
Springfield  Fire  and  Marine  in  1884,  with  which  he  remained  six  years,  resigning  in 
1890  to  take  the  secretaryship  of  the  Safety  Car  Heating  and  Lighting  Company  of 
New  York  City.     He  came  to  the  National  as  assistant  secretary  in  1891. 

Fred.  S.  James  supervises  the  western  department  from  Chicago,  and  George  D. 
Dornin  the  Pacific,  from  San  Francisco. 

THE  CHARTER  OAK  FIRE  AND  MARINE  INSURANCE  COMPANY. 
The  Charter  Oak  Fire  and  ^Marine  Insurance  Company,  of  Hartford,  was  organ- 
ized with  a  capital  of  $300,000,  July  16,  1856.  Ralph  Gillett  was  elected  president 
and  Joseph  H .  Sprague,  secretary.  Dui'ing  the  war  the  capital  was  in  a  state  of 
chronic  impairment.  In  August,  1866,  tlie  commissioner  of  New  York  revoked  its 
certificate  to  do  business  in  that  state  because  the  impairment  exceeded  twenty  per 
cent.  To  restore  technical  solvency  the  capital  was  reduced  to  ^150,000.  At  the 
time  of  its  destruction  by  the  Chicago  fire  its  surplus  was  nominal.  Presidents  were 
Ralph  Gillett;  B.  Hudson,  protein^  and  Joseph  H.  Sprague;  secretaries, Joseph  H. 
Sprague,  Julius  JM    Sexton,  James  Goodwin  and  George  Nevers. 


INSURANCE   IN   CONNECTICUT.  53 

THE  HOME  INSURANCE  COIMPANY  OF  NEW  HAVEN 
Was  organized  in  1859  on  a  capital  of  ^150,000,  which  was  increased  in  February, 
i860,  to  #200,000.  D.  R.  Satterlee  was  elected  president  and  Charles  Wilson  secre- 
tary. For  the  first  two  years  it  did  both  a  fire  and  marine  business,  but  after 
January  15,  1862,  risks  were  confined  to  fire  and  inland  navigation.  Progress  was 
slow  during  the  war.  At  the  beginning  of  1862  its  statement  showed  an  impairment 
of  over  $44,000.  The  capital  was  increased  to  ^^500, 000  in  April,  1S64,  and  in  Jan- 
uary, 1S66,  to  $1,000,000,  of  which  $350,000  were  contributed  in  cash  and  $150,000  in 
a  stock  dividend.  Losses  were  so  heavy  during  the  year  that  the  directors  laid  an 
assessment  of  fifteen  per  cent. ,  thus  replacing  the  scrip  with  cash.  During  the 
twelve  months  the  price  of  the  shares  fell  from  $180  to  $100.  Although  the  impair- 
ment continued  the  company  paid  dividends  at  the  rate  of  about  ten  per  cent,  per 
annum  from  the  start  till  near  the  end.  With  almost  a  thousand  agents  in  tlie  field 
it  pushed  for  business  with  zeal  iintempered  b}'  discretion. 

An  oflScial  examination  of  the  Home  in  June,  1870,  showed  that  at  least  one-half 
of  the  capital  was  extinguished.  It  was  now  reduced  to  $500,000,  and  important 
changes  were  made  in  the  management.  But  old  wounds  were  severe,  its  invest- 
ments in  bad  shape,  and  heavy  losses  continued.  Early  the  next  year  it  went  into 
liquidation,  and  General  S.  E.  IMerwin  was  appointed  trustee.  The  wreck  proved 
unexpectedly  disastrous,  the  stockholders  getting  nothing  and  the  creditors  very 
little.  Payment  of  unjustifiable  dividends  had  caused  the  shares  to  be  sought  as  an 
investment,  so  that  the  failure  caused  much  local  distress. 

Benjamin  Noyes,  first  insurance  commissioner  of  Connecticut,  whose  exper- 
ience as  dominant  director  of  the  State  Fire,  and  as  manager  of  a  life  company,  that 
under  a  succession  of  names  went  from  bad  to  worse  till  death  closed  its  career,  gave 
him  good  opportunities  to  study  from  the  inside  the  effects  of  abnormal  methods,  in 
his  last  report  wrote  thus  of  the  Home.  Wrath  that  such  things  should  occur  at  his 
own  door  puts  a  twist  into  the  words  through  which  his  feelings  find  utterance. 

"There  never  was  a  more  reckless  business  conceived  of  than  ma3"  be  made  out  of  fire 
insurance,  and  when  we  think  of  the  case  of  the  '  Home  '  at  our  own  door,  we  blush  for  its  man- 
agement, while  we  stronglj'  endorse  the  integrity  of  its  stockholders  and  directors,  not  that  the 
latter  did  \visel3',  or  that  they  were  influenced  by  good  counsel  as  manager,  for  the  result  shows 
the^'  were  made  to  believe  by  an  officer  of  the  compan}-  that  unearned  premiums  were  profits 
realized,  and  that  borrowing  and  returning  was  an  ever3'-day  affair,  especially,  when  after  receipts 
seemingly  justified  the  return. 

"The  rocks  which  dashed  the  '  Home,'  of  New  Haven  in  pieces  are  all  within  the  soundings 
we  have  been  taking  for  the  fraternit}'  in  former  reports,  and  the  onlj-  difference  which  marks  the 
case  of  this  company  is  its  rapiditj-.  After  they  had  doubled  their  capital  twice,  doubled  their 
agencies  and  quadrupled  their  risks  on  many  classes  of  property,  the  business  became  too  large 
to  control,  and  the  losses  followed  too  rapidly  to  make  them  known  to  the  directors  ;  as  a  matter 
of  course  confusion  and  uncertainty  soon  involved  the  company  in  such  a  dense  cloud  that  the 
directors,  in  a  state  of  alarm,  ended  the  matter,  as  they  supposed,  by  placing  the  property  in  the 
hands  of  a  trustee,  to  be  closed  up,  for  the  benefit  of  the  creditors,  with  no  prospect  of  saving 
much,  if  anything,  for  the  stockholders." 

THE  NORTH  AMERICAN  FIRE  INSURANCE  COMPANY  OF  HARTFORD. 
This  company  was  organizea  in  1S57,  on  a  capital  of  $300,000,  of  which  the 
charter  required  ten  per  cent,  to  be  paid  in  cash,  while  allowing  tlie  remaining  ninety 
per  cent,  to  rest  on  secured  notes.  However,  as  one  state  after  another  fell  into  line 
in  refusing  longer  to  recognize  the  stock  note  as  an  a^set,  it  soon  vanished.  Except 
in  1862,  the  company  paid  dividends  without  interrtiption,  and  for  the  last  three 
years  before  its  downfall  at  Chicago,  at  tlie  rate  of  twelve  per  cent,  per  annum.     In 


64  INSURANCE   IN   CONNECTICUT. 

fact,  the  company  was  so  depleted  by  dividends  that  it  seldom  had  a  surplus. 
Presidents  were :  James  G.  Bolles,  1857;  A.  F.  Hastings,  i860;  James  G.  BoUes, 
1866;  W.  C.  Hastings,  1868.  Secretaries:  J.  A.  Wallace,  1857;  W.  C.  Hastings, 
i860;  J.  B.  Pierce,  1868. 

THE  NEW  ENGLAND  FIRE  AND  MARINE  INSURANCE  COMPANY  OF  HARTFORD. 
This  company,  with  a  capital  of  ^200,000,  was  organized  in  1858.  Nathan  M. 
Waterman  was  elected  president,  and  George  D.  Jewett,  secretary.  In  1863  Mr. 
Jewett  became  president  and  Robert  A.  Johnson,  secretary.  From  the  start  the 
company  struggled  against  adverse  conditions  and  wound  up  in  1866. 

THE  NORWALK  MARINE  AND  FIRE  INSURANCE  COMPANY. 
This  company  was  chartered  in  1858,  and  began  business  in  i860,  on  a  paid 
capital  of  $50,000.  About  si.x  years  ago  a  controlling  interest  in  the  stock  was 
bought  by  the  London  and  Lancashire  Insurance  Company  of  Liverpool,  England, 
and  the  organization  has  since  been  utilized  in  the  conduct  of  its  American-  business. 
The  capital  was  subsequently  increased  to  $200,000. 

THE  THAMES  FIRE  INSURANCE  COMPANY  OF  NORWICH. 
This  company  was  organized  in  1859.  It  began  with  a  capital  of  gi  13,700, 
which  was  increased  in  1 864  to  $200,000.  It  went  out  of  business  in  1 866,  and  having 
settled  all  claims,  paid  back  to  the  stockholders  about  fifty  per  cent,  of  the  face 
value  of  the  shares.  Amos  W.  Prentice  was  president.  Secretaries  were  :  O.  P.  Rice, 
1859;  B.B.Whittemore,  1864. 

THE  UNION  FIRE  INSURANCE  COMPANY  OF  HARTFORD. 
This  company  was  formed  in   1859,  but  soon  after  the  beginning  of  the  war 
retired  from  the  field  and  returned  the  capital  to  the  shareholders.     Presidents  were  : 
J.  W.  Danforth  and  Ralph  Gillett. 

THE  PUTNAM  FIRE  INSURANCE  COMPANY  OF  HARTFORD. 

This  company  was  organized  September  i,  1864,  on  a  capital  of  $300,000. 
Caleb  B.  Bowers  was  elected  president,  Daniel  Buck,  secretary',  and  in  October 
William  N.  Bowers  was  added  to  the  official  corps  as  vice-president.  After  a  hot 
fight  the  Bowers  regime  was  overthrown  at  the  annual  election  in  June,  1865,  when 
Samuel  Woodruff,  of  Woodruff  &  Beach,  boilermakers  and  machinists — a  firm  of 
national  reputation  during  the  war — was  made  president.  That  residence  in  Hart- 
ford presumptively  qualified  a  person  to  run  an  insurance  company  had  become  a 
current  superstition.  First  and  last  the  delusion  cost  investors  and  other  victims  of 
misplaced  confidence  a  great  deal  of  money  From  the  start  the  venture  ran  behind, 
and  though  the  pace  now  and  then  slackened,  the  drift  was  never  long  reversed.  The 
secretary  had  no  taste  for  the  economies  which  successful  companies  in  their  early 
days  have  found  indispensable.  The  president  had  been  willingly  lured  into  a 
variety  of  outside  schemes.  Promoters  looked  to  him  for  cash.  Meanwhile  war- 
contracts  had  dried  up.  He  borrowed  large  sums  from  the  company  which  it  was 
inconvenient  to  pay.  A  small  over-issue  of  stock,  due  to  carelessness,  as  his  friends 
claimed,  added  to  the  confusion.  Mr.  Buck  was  succeeded  by  S.  G.  Parsons  in  1868. 
The  next  year  Mr.  Woodruff  was  forced  to  retire.  In  his  valedictory  he  attributed 
the  misfortunes  of  the  enterprise  to  the  mismanagement  of  the  first  secretary. 

George  M.  Welch  followed  as  ad  inieriiii  president  from  January  3rd  till  August 
18,  1870,  when  Robert  E.  Day  was  elected.     On  probing  its  wounds  the  capital  was 


INSURANCE  IN   CONNECTICUT.  55 

found  to  be  impaired  over  thirty-three  per  cent.  It  was  now  reduced  to  S300,ooo, 
and  then  raised  by  cash  pa>-nients  to  §400,000.  While  the  new  management  was 
strivinfj  to  correct  pa.st  errors  tlie  company  was  destroyed  by  the  great  Chicago  fire, 
its  losses  amounting  to  $1,206,000. 

THE  QUINNIPIAC  IXSURAN'CE  COMP.\NV  OF  NEW  II.VVEN, 
Chartered  in  1869,  was  organized  with  a  capital  of  js  100,000.     J.    D.    Dewell  was 
elected  president,  and  George  S.  Lester  secretary.     In  1871  the  company  voluntarily 
retired,  paying  in  full  all  claims  and  returning  its  capital  to  shareholders. 

ORIENT  INSURANCE  COMPANY  (HARTFORD). 

Although  the  charter  of  the  Orient  was  granted  by  the  legislature  of  Connecticut 
in  May,  1867,  the  company  did  not  organize  until  November  23,  1871,  being  the 
lineal  successor  of  the  City  Fire  Insurance  Company,  which,  with  most  of  its  con- 
temporaries was  blotted  out  of  existence  in  the  holocaust  at  Chicago.  By  the  terms 
of  tlie  charter,  a  capital  of  §2,000,000  was  authorized  with  the  privilege  of  doing 
business  on  a  minimum  of  $500,000.  In  view  of  the  enormous  drafts  upon  the 
resources  of  Hartford  required  to  pay  the  losses  at  Chicago,  the  corporators  thought 
best  to  begin  with  half  a  million,  and  to  increase  as  the  growth  of  business  might 
demand. 

The  first  directors  were  David  Gallup,  Newton  Case,  George  AI.  Bartholomew, 
Charles  T.  Webster,  William  Boardman,  Daniel  Phillips,  Augustus  S.  Jerome,  Fred 
R.  Foster,  John  W.  Danforth,  Selden  C.  Preston,  James  G.  Batterson,  Thomas  T. 
Fisher,  Joseph  S.  WoodmfF,  Levertt  Brainard,  Charles  J.  Cole,  William  H.  Bulkeley, 
Knight  D.  Cheney,  George  S.  Lincoln,  Samuel  F.  Jones,  James  Campbell  and  George 
M.  Pullman.  The  first  officers  were,  Charles  T.  W^ebster,  president ;  Selden  C.  Pres- 
ton, vice  president,  and  George  W.  Lester,  secretary  ;  these  gentlemen  having  held 
similar  positions  in  the  City  Fire,  whose  agency  system  the  Orient  proceeded  to 
adopt. 

January  i,  1S72,  the  first  policies  were  written,  and  a  handsome  business  was  as- 
sured from  the  outset.  Ten  months  later  came  the  Boston  fire,  which  took  §164,000 
from  the  Orient,  a  heavy  blow  to  befall  a  small  company  at  the  beginning  of  its 
career.     However,  it  met  every  obligation  by  sight  drafts,  paying  all  losses  in  full. 

To  preserve  technical  solvency  the  capital  was  now  reduced  to  $350,000.  In 
January,  1875,  an  extra  dividend  of  §50,000  in  cash  was  declared  and  simultaneously 
turned  back  into  the  treasury  so  as  to  raise  the  capital  to  §400,000.  The  process  was 
repeated  in  Januarv',  1876,  and  in  Januar}-,  1877,  when  out  of  earnings  the  capital 
was  fully  restored  to  its  original  figures.  Those  were  good  davs  for  insurance  inter- 
ests, for  the  ruin  of  many  companies  by  the  Chicago  and  Boston  fires  stopped  for  a 
time  destructive  competition. 

S.  C.  Preston  succeeded  Mr.  Webster  in  May,  1S74,  and  held  the  place  till  1S83. 
In  1881  the  capital  was  raised  by  cash  subscriptions  to  §1,000,000.  John  W.  Brooks, 
a  banker  of  Torrington,  who  had  just  completed  a  term  of  three  years  as  insurance 
commissioner  of  Connecticut,  held  the  presidency  from  1883  till  ^May,  1886,  when  he 
was  followed  by  Charles  B.  WHiiting. 

Mr.  Whiting  was  born  of  New  England  parentage  at  Greenbush,  N.  Y.,  Sep- 
tember 3,  1828.  After  passing,  both  at  the  east  and  the  west,  through  rather  more 
than  the  Usual  variety  of  experiences  that  befall  adventurous  voungmen,  he  returned 
from  the  banks  of  the  ^Mississippi  to  New  York  city  in  1866,  and  permanently  en- 
tered the  field  of  insurance.  From  October,  of  that  year,  till  May,  1870,  he  was  sec- 
retary of  the  National  Board  of  Fire  Underwriters.     Thence  he  faithfullv  served  the 


56  INSURANCE   IN   CONNECTICUT. 

Home  of  New  York  city  for  ten  >-ears,  till  forced  by  broken  health  to  seek  rest. 
After  recovery  and  a  brief  connection  with  the  Springfield  Fire  and  ]\Iarine,  he  came 
to  Hartford  in  October,  i88i,as  secretary  of  the  Hartford,  and  held  the  place  till 
elected  president  of  the  Orient.  Mr.  Whiting  is  also  a  racy  and  entertaining  writer. 
He  has  delivered  a  number  of  addresses.  One,  essentially  historical,  delivered  at 
Niagara  Falls,  June  9,  1 885,  has  been  of  great  service  in  the  preparation  of  these  papers. 

Like  mercury  in  a  thermometer  the  prosperity  of  insurance  interests  rises  in 
good  times  and  drops  (often  to  zero)  in  seasons  of  adversity.  The  panic  of  April, 
1893,  with  its  long  sequence  of  failures  and  disorder,  so  increased  the  loss  ratio  from 
fires  that  in  the  height  of  the  trouble  veteran  underwriters  stood  aghast  at  sight  of 
the  ruins.  To  add  to  the  strain,  the  assets  of  companies  fell  heavily  in  market  value 
to  that  extent  diminishing  their  resources.  At  the  time  of  the  outbreak  the  net  sur- 
plus of  the  Orient  was  too  small  to  carry  the  company  through  without  impairment. 
Hence,  in  December,  1893,  the  stockholders  voted  to  reduce  the  capital  to  $500,000. 

January  i,  1897,  gross  assets  amounted  to  ;g2,2 15,470.20,  and  net  surplus  to 
$562, 165.37,  the  last  item  liaving  increa.sed  $243,769.54  since  January  i,  1894.  These 
wide  and  rapid  fluctuations  illustrate  the  vagaries  of  fire  insurance.  Statistics  cease 
to  guide  when  the  moral  hazard  breaks  loose. 

Secretaries  have  been  George  W.  Lester,  1 872-February,  1886;  George  B.  Bod- 
well,  Februaiy,  1886-June,  188S  ;  James  L^.  Taintor,  June  i,  1888-.  Assistant  secre- 
taries, George  B.  Bodwell,  October,  1885  ;  Howard  W.  Cook,  June  i,  1888. 

James  U.  Taintor,  secretary,  was  born  October  23,  1844,  in  Pomfret  Conn., 
whence  the  family  moved  to  Colchester  in  1848  ;  graduated  at  Yale  College  in  1866  ; 
was  assistant  clerk  of  the  Connecticut  House  of  Representatives  in  1866,  clerk  in 
1867,  and  clerk  of  the  Senate  in  1868  ;  for  a  short  time  in  1869  belonged  to  an  insur- 
ance firm  in.  Meriden  ;  in  July  of  the  same  year  became  a  special  agent  of  the  Phoenix 
Fire,  of  Hartford  ;  and  in  June,  18S8,  secretary  of  the  Orient. 

Howard  W.  Cook,  born  in  Hartford  August  19,  1858,  left  the  high  school  in  his 
junior  year  to  enter  the  Orient,  where,  having  served  faithfully  and  intelligently 
through  lower  grades,  he  was  made  assistant  secretary  in  1 888. 

B.  W.  French  manages  the  western  department  from  Chicago  ;  Trezevant  & 
Cochran,  the  southwestern  from  Dallas,  Texas ;  and  W.  J.  Callingham  the  Pacific 
from  San  Francisco. 

THE   MERIDEN    INSURANCE  COMPANY, 

Incorporated  in  1868,  was  organized  early  in  1872,  with  a  capital  of  ;g200,ooo. 
Jedediah  Wilcox  was  elected  president,  and  E.  B.  Cowles,  secretary.  A  few  months 
later  the  Boston  fire  drew  $36,000  from  its  assets.  While  supervising  the  settlement 
of  claims  in  that  city,  the  vice-president,  L.  W.  Clark,  just  about  filled  the  gap  with 
fresh  premiums.  In  1878  the  capital  was  increased  to  ^300,000,  but  it  was  again 
reduced  to  $200,000  in  December,  1881,  when  its  business  outside  of  New  England 
was  reinsured  in  the  German-American  and  Niagara,  of  New  York.  In  Januan,', 
1892,  the  company  reinsured  its  risks  and  retired  altogether,  not  from  necessity,  but 
because  the  stockholders  saw  that  the  advantages  held  by  powerful  rivals  would  ulti- 
mately force  .small  concerns  out  of  existence. 

In  round  numbers,  during  twenty  years,  the  company  took  $2,488,000  in 
premiums,  paid  $1,500,000  in  losses,  and  $280,000  in  dividends. 

L.  W.  Clark  was  president  from  1874  to  1881,  when  he  became  assistant  secre- 
tary of  the  Connecticut,  and  was  succeeded  by  A.  Chamberlin.  E.  B.  Cowles  con- 
tinued secretary  throughout.  He  then  became  assistant  manager  for  New  England 
of  the  Roj'al  Insurance  Company,  with  headquarters  at  Boston. 


INSURANCE   IN   CONNECTICUT.  57 

THE  ATLAS  INSURANCE  COMPANY, 
Successor  of  the  Charter  Oak,  was  chartered  in  1872,  and  1)egan  business  in  July, 
1873,  on  a  capital  of  j5200,ooo.  In  August,  1877,  the  management  ceased  taking  new 
business,  but  carried  existing  risks  till  they  ran  off.  In  June,  1879,  the  stockholders 
voted  to  reduce  the  capital  to  ^100,000  and  resume  business.  An  examination  in 
Noveml)er,  1881,  disclosed  an  impairment  of  over  twenty-five  per  cent,  in  the  capital, 
when  the  commi.ssionersuccessfull)' petitioned  the  court  to  restrain  thecouipau)-  from 
the  further  prosecution  of  business.  Joseph  H.  Sprague  was  president,  and  Edward  B. 
Huntington  and  George  S.  Merritt,  secretaries. 

MANAGEMENT  OF  FOREIGN  COMPANIES. 
In  1880  the  Scottish  Union  and  National  Insiirance  Company,  of  Edinburgh, 
and  the  Lion  Fire,  of  London,  having  decided  to  enter  the  United  States,  sent  com- 
mittees hither  to  select  a  general  manager.  After  e.vamining  the  field  they  tendered 
the  place,  entirely  without  solicitation  on  his  part,  to  Martin  Bennett,  of  Hartford. 
His  position  at  the  head  of  the  Connecticut  Fire  was  eminently  agreeable,  but  the 
offer  came  in  such  form  as  to  be  irresistiljle.  The  record  and  presence  of  Mr.  Ben- 
nett determined  the  decision  of  the  committees,  and  results  have  shown  the  wisdom 
of  their  choice.  Graduating  at  Brown  University  as  a  civil  engineer  in  i860,  he 
entered  the  oflJice  of  the  Connecticut  Fire  August  14th,  was  elected  secretary-  October 

23,  1865,  and  president  January  28,  1873.  After  the  Chicago  fire  he  presented  the 
case  of  his  company  with  such  captivating  candor  that  every  creditor  assented  to 
terms  of  settlement  that  saved  its  charter. 

October  11,  1880,  Mr.  Bennett  resigned  the  presidency  of  the  Connecticut  to 
enter  upon  his  new  duties.  Instead  of  going  to  New  York  or  elsewhere  he  estab- 
lished the  American  headquarters  of  the  two  foreign  companies  in  Hartford.  The 
venture  has  been  remarkably  successful.  A  net  remittance  to  this  country  by  the 
Scottish  Union  of  $839,695  had  grown  Jauuaiy  i,  1897,  to  $3,681,118.60,  nearly  all 
invested  in  the  United  States.  During  the  period  its  receipts  in  this  countn'  were 
$12,549,454.87;  losses  and  expenses,  $10,615,318,  all  calculated  on  a  net  basis. 

Mr.  Bennett  has  been  president  of  the  Hartford  Local  Board  and  of  the  National 
Board  of  LTuderwriters.  He  is  a  forceful  and  witty  writer,  and  has  often  been  called 
to  read  addresses  at  important  meetings. 

James  H.  Brewster,  assistant  manager,  was  born  at  Coventry,  Conn.,  December 

24,  1845.  In  the  Connecticut  Fire  Insurance  Company  and  in  his  present  position 
he  had  on  the  25th  of  February,  1897,  beeu  associated  with  Mr.  Bennett  thirty  years 
continuoush'. 


58 


INSURANCE   IN  CONNECTICUT. 


CHAPTER  VI. 


INS URANCE    IN   CO NNE  CTICUT—  Coniinued. 


EARLY  forty  mutual  fire  insurance  companies,  from  time  to  time,  have  been 
chartered  by  the  General  Assembly  of  Connecticut.  January  i,  1897, 
seventeen  were  in  existence.  Their  names,  dates  of  incorporation  and 
gross  assets,  less  premium  notes,  were  as  follows  : 


when 
Name.  incorporated. 

Mutual  Assurance  of  Norwich 1795 

Windham  County  Mutual 1826 

Tolland  County  Mutual 1828 

Hartford  County  Mutual 183 1 

Litchfield  Mutual 1833 

Middlesex  Mutual  Assurance 1836 

New  London  County  Mutual 1840 

Danbury  IMutual 1850 

Farmers'  IMutual 1853 

Farmington  Valley  Mutual 1854 

Madison  Mutual 1855 

Greenwich  Mutual 1855 

Harwinton  Mutual 1856 

Washington  Mutual 1862 

State  IMutual 1867 

Rockville  Mutual 186S 

Patrons'  Mutual     .    .  ' 1888 


Gross  assets,  less  premium 
notes,  Januarj-  i,  1S96. 

g   13,256.29 

47.342-38 
67,656.40 

575-500-00 

97,704.99 

720,225.55 

121,806.46 

29.570-17 

229.85 

5.710.85 

8,498.41 

6,915-44 

197-30 

lOI.IO 

30,786.46 
8,073.32 

1,266.10 


The  needs,  which  brought  into  being  the  oldest  of  the  jMutuals,  have  been 
briefly  stated  in  the  account  already  given  of  the  IMutual  Assurance  of  Norwich.  A 
few  words  with  regard  to  three  or  four  of  the  larger  companies  will  perhaps  give  a 
sufiGciently  clear  idea  of  the  manner  of  growth. 

Upon  petition  of  Vine  Robinson,  and  fifty-five  others,  the  Windham  County 
Mutual  was  incorporated  in  May,  1826,  and  organized  the  following  June.  It 
was  allowed  to  insure  only  houses  and  other  buildings.  The  insured  paid  a  small 
23ercentage  of  the  premium  in  cash,  and  the  rest  in  a  note  liable  to  assessment  in  case 
of  losses  by  fire. 

Only  three  assessments  have  ever  been  laid:  the  first  in  1829,  yielding  $653  ; 
the  second  in  1830,  yielding  $(iO-j.i\\\  and  the  third  in  1 831,  yielding  $498.64.  In 
1 87 1  the  company  was  authorized  to  dispense  with  premium  notes.  Policies  were 
made  a  lien  on  buildings  and  lands. 

The  position  of  president  was  at  first  honorary,  but  the  directors  made  a  radical 
departure  in  June,  1837,  when  they  voted  him  an  annual  salary  of  $9.  Revolutions, 
it  is  said,  never  go  backward.  In  1842  the  directors  voted  to  allow  themselves  ;^i 
each  for  attendance  at  meetings.  As  they  resided  in  all  parts  of  the  county,  and 
were  compelled  to  drive  from  six  or  eight  to  twenty-five  miles  over  hilly  roads,  they 
claimed  that  the  pay  was  not  excessive.  A  charge  of  seventy-five  cents  for  new  pol- 
icies, and  of  fifty  for  renewals,  which  made  up  the  entire  compensation  of  the 
secretary,  was  voted  in  1839,  and  proved  such  a  mine  of  wealth  that  in  1845  he  paid 
$40  for  the  contract  for  the  year.  The  first  statement  to  be  found  bears  date  October  i , 
185 1,  when  the  company  had  in  cash  and  in  tlie  hands  of  agents  5190.05,  and  in 
interest-bearing  notes  $1018. 


INSURANCE   IN  CONNECTICUT.  59 

Presidents  have  been:  \'me  Robinson,  1S26-43;  Asael  Hamnionri,  1843-49; 
Armin  lioUe.s,  1S49-56;  Aaron  H.  Storrs,  1856-78;  John  Galliq),  1878-9;  David 
Greenslit,  1879. 

The  positions  of  secretary  and  treasurer  have  been  filled  b}'  the  same  persons, 
except  from  1848  till  1856,  and  again  since  1892.  Executive  functions  have  been 
lodged  mostly  in  the  office  of  the  secretar\'.  Secretaries  have  been  :  Adams  White, 
1826-48;  B.  Wheaton,  1848-9;  Edwin  S.  Chase,  1849-56;  Aug.  F.  Fisher,  1856-7; 
John  Palmer,  1857-92  ;  James  C.  Palmer,  1892. 

John  Palmer  was  connected  with  the  company  thirty-six  years,  and  during  the 
time  its  assets  grew  from  $2,016  in  1856,  to  $5 1,160  in  1892. 

THE  HARTFORD  COUNTY  MUTUAL 
was  incorporated  in  May,  183 1,  for  the  purpose  of  insuring  houses  and  other  build- 
ings in  the  county  of  Hartford  without  the  limits  of  the  city  of  Hartford.  At  the 
first  meeting  held  in  the  State  House  September  19th,  David  Grant  was  elected 
president,  and  Elisha  Phelps,  secretar}-.  After  a  few  weeks  Mr.  Phelps  resigned  and 
was  succeeded  by  Charles  Shepard. 

The  "premium  note"  was  perhaps  the  most  characteristic  feature  in  the  early 
history  of  the  Mutuals.  Upon  ordinary  detached  risks  the  company  required  a  note 
equal  to  two  (2)  per  cent,  of  the  face  of  the  policy  and  ten  per  cent,  of  the  first  year's 
premium  in  cash.     On  buildings  more  exposed  the  rates  were  higher. 

The  following  year  the  company  was  authorized  to  insure  property  outside  the 
limits  of  the  county,  and  to  charge  the  premium  in  a  gross  sum  instead  of  rating  the 
same  by  the  year,  the  lien  remaining  the  same. 

In  1835  the  cash  payment  on  effecting  insurance  was  raised  to, three  and  one- 
third  per  cent,  of  the  premium  charge.  The  system  with  occasional  variations  in 
the  rates  continued  till  1889,  when  the  premium  note  was  discarded  and  the  whole 
business  put  on  a  purely  cash  basis. 

The  Hartford  County  began  modestly,  and  after  disbursing  ;g  1 2  in  losses,  and 
$179  in  contingent  expenses,  had  a  surplus  of  ^12  at  the  end  of  the  first  twelve 
months.  For  the  next  eleven  years  the  business  grew  slowly,  and  at  each  annual 
meeting  the  books  showed  a  small  balance  on  the  credit  side  of  the  ledger.  In  1842, 
however,  came  a  turn  in  the  tide.  Losses  mounted  up  to  ^3,269. 14,  and  at  the  close 
of  the  fiscal  year,  in  December,  the  directors  were  confronted  with  a  deficit  of 
$2i^2.ii.  Matters  seemingly  trivial  have  often  proved  to  be  pivots  on  which  the 
fate  not  only  of  nations,  but  of  civilization  itself,  has  turned.  So  in  a  small  way  of 
this  deficit.  It  provoked  earnest  thought  and  much  discussion.  Some  advocated  an 
assessment.  Mr.  Shepard  took  ground  in  favor  of  borrowing  the  money  and  raising 
the  cash  rates  to  a  remunerative  basis.  Already  the  theory  which  prevailed  at  the 
outset,  and  which  in  many  changeful  forms  has  been  revived  and  discarded  since, 
had  proved  its  insufficiency.  The  sensible  views  of  the  secretary  were  approved, 
and  a  note  for  the  arrearages,  presumably  indorsed  by  the  officers,  was  discounted  at 
the  Hartford  Bank.  From  current  receipts  the  obligation  was  soon  discharged,  and 
the  company  has  never  been  compelled  by  reverses  to  pass  through  a  similar  expe- 
rience since. 

Not  till  1853  was  the  company  permitted  to  insure  buildings  within  the  city 
limits  of  Hartford.  On  the  morning  after  the  great  Chicago  fire,  residents  of  the 
city  did  not  know  whether  the  policies  on  their  property  issued  by  stock  companies 
were  worthless  or  not.  Of  the  solvency  of  the  Hartford  County  Mutual  they  were 
certain,  for  it  did  no  business  beyond  the  boundaries  of  Connecticut.     Many  came  in 


60  INSURANCE   IN  CONNECTICUT. 

at  that  time  to  take  advantage  of  the  protection  it  offered,  and  have  since  remained 
upon  its  books. 

From  1835  to  1844  policies  were  renewed  on  the  payment  of  a  fee  of  twenty-five 
cents  to  the  secretary,  with  no  further  cost  to  the  insured.  Meanwhile  new  members 
paid  their  initiatory  premium. 

The  company  takes  only  the  safer  class  of  risks,  as  dwellings  and  farm  buildings 
with  their  contents.  It  does  not  insure  churches,  school-houses,  stores  or  factories. 
Its  business  has  always  been  confined  to  the  state  of  Connecticut. 

Presidents  have  been  David  Grant,  1831-38;  Daniel  St.  John,  1S38-44;  Charles 
Shepard,  1844-67  ;  D.  D.  Erving,  1867-73  ;  Julius  Catlin,  1873-4;  Walter  H.  Havens, 
1874-6;  James  B.  Shultas,  1876-80;  William  E.  Sugden,  1880. 

Secretaries,  Elislia  Phelps,  one  month  in  1831  ;  Charles  Shepard,  October,  1831- 
44  ;  R.  A.  Erving,  1844-53  ;  D.  D.  Erving,  1853-67  ;  William  A.  Erving,  1867-. 

R.  A.  Erv'ing  resigned  to  accept  the  position  of  secretary  of  legation  under  Ex- 
Governor  Thomas  H.  Seymour,  then  recently  appointed  minister  to  the  court  of  St. 
Petersburg.  Having  spent  a  number  of  }-ears  in  Russia,  he  was  lost  with  the  steamer 
Pacific  on  the  voyage  home.     The  secretary  has  alwa}'s  been  the  executive  officer. 

THE   MIDDLESEX   MUTUAL  ASSURANCE  COMPANY. 

Not  the  oldest  but  the  largest  of  the  mutual  fire  companies  of  the  state  in  busi- 
ness and  assets,  is  the  Middlesex  Mutual  Assurance  Company  of  Middletown,  char- 
tered in  May,  1836,  and  organized  June  13th  of  the  same  year.  Richard  Hubbard 
was  elected  president,  and  John  L,.  Smith,  secretary  and  treasurer.  During  the  first 
year  four  hundred  and  sixty-seven  policies  were  written.  At  the  annual  meeting  in 
June,  1838,  William  Woodward  was  elected  secretary,  and  Samuel  Cooper  treasurer. 
It  was  voted  to  move  the  office  from  the  store  of  John  L-  Smith  to  that  of  E.  Hunt 
&  Co.  In  1865  it  was  moved  to  a  room  under  the  Universalist  church,  and  was  again 
transferred  to  permanent  quarters  in  the  new  building  of  the  company  the  next  }ear. 

At  first  a  small  cash  premium  was  required  from  the  insured  to  meet  current 
expenses  and  ordinary  losses,  and  a  promissory  note  to  be  held  in  reserve  for  emer- 
gencies. In  1859  the  premium  note  system  was  abandoned.  By  a  charter  amend- 
ment policies  gave  the  company  a  lien  on  the  buildings  insured  and  on  the  land. 

In  June,  1886,  the  assets  having  increased  to  $530, 174.77,  a  still  further  innova- 
tion was  made.  The  directors  voted  to  cancel  and  release  the  lien  reserved  on  all 
policies  outstanding  at  the  close  of  business,  June  30,  1886,  and  to  reserve  no  lien 
aside  from  the  cash  premium,  in  policies  issued  on  or  after  July  i,   1886. 

Presidents  have  been  Richard  Hubbard,  1836-9;  vSamuel  Cooper,  1839-54; 
William  S.  Camp,  1856-66  ;  William  D.  Willard,  1866-67  ;  William  R.  Galpin,  1867- 
79  ;  Elijah  Ackley,  1879-83  ;  John  N.  Camp  (temporary)  October,  1883-June,  1884; 
1884,  O.  Vincent  Coffin.  Besides  holding  many  positions  of  trust  the  present  incum- 
bent, Mr.  Coffin,  was  mayor  of  Middletown  for  two  terms,  was  elected  to  the  State 
Senate  in  1887  and  1889,  and  Governor  of  Connecticut  in  1894. 

Secretaries  have  been  John  L.  Smith,  1836-38;  William  Woodward,  1S38-49; 
Stephen  Taylor,  1849-56;  William  Woodward,  1856-66;  John  W.  Hoyt,  1866-67; 
H.  F.  Boardman,  1867-82  ;  C.  W.  Harris,  1882-. 

THE  NEW  LONDON  COUNTY  MUTUAL, 
Organized  July  i,  1840,  has  won  a  secure  position.     Presidents  have  been  Joseph 
Backus,  1S40-44;  Joel  W.   White,  1844  (March  till  October);  John  G.  Huntington, 
1844-61  ;  Elijah  A.  Bill,  1861-68  ;  E.  F.  Parker,  1868-95  ;  Charles  J.  Winters,  January, 
I 895-. 


INSURANCE   IN  CONNPXTICUT.  61 

Secretaries,  J.  DeWitt,  1S40-7;  John  H.  DeWitt,  1847-54;  John  L.  Devotion, 
1854-75  ;  C.  J.   Fillmore,  1875-7S;  William  Roatli,  1S78-S5  ;  J.  F.  Williams,  1885-. 

THE  STATE  :MUTUAL  OF  HARTFORD, 
Though  nearly  the  youngest  on  the  list,  has  gained  sufficient  strength  to  guarantee 
its  permanence.  September  2,  1867,  Ralph  Gillett  was  chosen  president,  and  Isaac 
Cross,  Jr.,  secretary  and  treasurer.  There  was  no  change  in  the  management  till  the 
death  of  Mr.  Gillett  April  17,  1894,  when  Mr.  Cross  was  made  president,  and  Franklin 
A.  Morley,  secretary.  A  loss  of  ^4,000  on  policy  No.  61  insuring  one  of  the  best 
dwellings  in  Windsor  occurred  June  29,  1S69.  The  assets  of  the  company  were 
insufficient  to  meet  the  call,  but  the  officers  made  up  the  deficiency  out  of  their 
private  funds  and  paid  the  claim  within  a  week.  It  pursues  a  conservative  course 
issuing  no  policy  for  over  $2,000. 

Ralph  Gillett,  born  in  Gilead,  Conn.,  October  24,  181 1,  moved  from  Ellington  to 
Hartford  in  1849,  and  was  one  of  the  first  to  start  in  this  cit}-  of  insurance  a  general 
insurance  agency.  He  was  first  president  of  both  the  City  and  Charter  Oak  Fire 
Insurance  Companies  and  of  the  Union  in  1 860. 


CHAPTER    VII. 
/:VS  URANCE    IN    CO  NNE  CTICU  T—  Continue  J. 

LIFE   INSURANCE.* 

T  may  be  said  that  the  successful  development  of  life  insurance  in  Connec- 
ticut has  been  confined  to  Hartford.  Companies  started  elsewhere  on  the 
plan  of  accumulating  sufficient  reserves  to  meet  every  claim  at  maturity, 
have  ended  in  failure.  Within  a  few  years  some  fraternities  have  adopted 
the  plan  of  contributing  a  fixed  sum  to  the  families  of  deceased  members, 
and  several  bodies  have  been  chartered  w-itli  authority  to  pay  losses  by  assessments 
on  sur\-ivors.  Siich  schemes  may  apparently  flourish  for  a  while,  but  they  lack  the 
features  that  insure  permanence.  Life  insurance  proper  has  come  to  be  a  matter  of 
science  and  equity.  Its  methods  have  been  evolved  so  as  to  conform  to  laws  of  aver- 
age which  are  almost  as  exact  in  operation  as  the  laws  of  physics. 

Dr.  Pinckney  W.  Ellsworth  and  James  L.  Howard  were  the  first  to  call  the 
attention  of  the  people  of  Hartford,  at  least,  in  an  effective  way,  to  the  subject.  Dr. 
Ellsworth  was  agent  of  the  International,  of  London,  England.  Mr.  Howard,  in 
February',  1846,  took  out  policy  No.  1079,  in  the  Mutual  Benefit  of  New  Jersey, 
and  at  the  same  time  accepted  the  local  agency  of  the  company.  Joseph  Lord  came 
up  from  New  York  city  to  initiate  him  in  the  theory  and  practice  of  canvassing. 
^Ir.  Howard  started  off  with  a  boom,  presenting  the  subject  not  only  in  private  inter- 
views, but  in  public  addresses.  Guy  R.  Phelps  was  so  impressed  with  the  merits  of 
the  system  that  he  took  a  policy  in  the  IMutual  Benefit.  Elisha  B.  Pratt  became  an 
early  convert.  Other  men  of  prominence  quickly  followed.  All  at  once  the 
novelty  became  the  talk  of  the  town. 

*  In  this  sketch  of  life  insurance  in  Connecticut,  no  account  is  given  of  the  operations  of 
assessment  companies  or  of  fraternal  or  benevolent  associations. 


62  INSURANCE   IN   CONNECTICUT. 

It  was  a  new  subject,  and  the  vigorous  presentation  of  the  affirmative  side  pro- 
voked a  good  deal  of  curious  opposition.  Some  good  people  argued  that  the  scheme 
was  irreligious  in  substituting  reliance  upon  human  instrumentalities  for  trust  in 
Providence.  Elder  Swan,  a  revivalist  famous  for  rough  eloquence,  and  for  the  lurid 
colors  in  which  he  painted  the  terrors  of  the  law,  in  a  sennon  at  an  annual  state 
convention,  resolved  to  crush  the  pernicious  novelty  at  a  blow.  Rising  to  a  climax 
in 'denunciation,  he  said  :  "  Suppose  that  Jesus,  on  His  way  to  the  Jordan,  had  met 
John  among  the  foothills,  and  to  the  question,  'Whither  goestthou?'  John  had 
answered :  '  Behold,  all  these  years  have  I  trusted  in  the  God  of  Israel,  and  have 
been  sorely  pressed  by  many  troubles.  Wist  thou  not  that  I  go  up  to  Jerusalem  to 
get  my  life  insured?'  Would  the  church,  my  hearers,  have  outlived  the  few  and 
feeble  days  of  infancy  had  treacher>'  so  foul  been  permitted  to  occur  and  to  pass  un- 
rebuked?  If  lack  of  faith  was  a  sin  then,  it  is  a  sin  now.  Avoid  the  snares  of  a 
perverse  generation,  and  say  to  the  tempter,  'Get  thee  behind  me,  Satan.'  " 

Prejudice  yielded  before  enlightened  discussion.  The  act  condemned  by  the 
good  elder  as  a  sin  is  now  classed  with  the  duties. 

•       THE  CONNECTICUT  MUTUAL  LIFE   INSURANCE  COMPANY  (HARTFORD). 

Discussion  of  the  merits  of  life  insurance  in  private  counting-rooms  would  have 
continued  indefinitely  in  many  towns  without  suggesting  the  thought  of  forming  a 
company  to  enter  upon  the  work.  Not  so  in  Hartford.  For  a  full  half  century  the 
city  had  been  engaged  in  fire  and  marine  underwriting.  Abilities  of  a  high  order 
had  been  attracted  to  the  field.  Carrying  on  operations  over  a  wide  area,  coming  in 
contact  with  many  minds,  and  trying  to  generalize  laws  from  accunuilating  stores 
of  fact,  managers  not  only  acqiiired  a  fondness  for  the  business,  but  unconsciously 
found  it  an  efficient  instnrment  for  sharpening  the  wits.  At  this  juncture,  too,  it 
was  beginning  to  pass  out  of  the  empirical  stage.  Principles  now  recognized  as  fun- 
damental were  discussed  pro  and  con  in  the  offices  of  the  Hartford,  the  .^tna,  and  the 
Protection.  The  first  two  saw  the  light  and  lived.  The  third  passed  on  in  the  old 
way  and  died. 

Early  in  1846  James  L,.  Howard  took  thirty  applications  for  policies  in  the 
Mirtual  Benefit  in  two  months.  Very  quickly  the  familiar  arguments  in  favor  of 
life  insurance  penetrated  the  community.  It  was  like  the  fall  of  a  stream  of  sparks 
on  tinder.  Long  habit  had  developed  in  the  city  an  instinct  for  underwriting  which 
seized  at  once  upon  the  advantages  to  be  gained  by  entering  the  field  promptly.  A 
charter  incorporating  The  Connecticut  Mutual  Life  Insurance  Company  was  drawn 
up  and  passed  by  the  General  Assembly  at  the  May  session  in  1846. 

The  document  carefully  guards  the  rights  of  all  parties.  In  case  of  loans  on 
real  estate  it  requires  double  security  on  unencumbered  property,  and  in  loans  on 
state  stocks  and  bank  stocks  a  margin  of  twenty-five  per  cent.  As  a  rule  managers 
do  not  seek  to  have  their  freedom  limited  by  sharp  restrictions,  for  it  is  only  in  sea- 
sons of  panic  and  disaster  that  the  wisdom  of  iron-bound  rules  becomes  manifest.  The 
corporation  was  impowered  to  insure  husbands  for  the  exclusive  benefit  of  wives  and 
children,  free  from  all  claims  originating  on  the  side  of  the  husband,  provided  the 
annual  premium  did  not  exceed  $100  (raised  to  $150  in  1848),  unless  paid  from  the 
private  property  of  the  wife.  This  was  at  a  time  when  the  law  regarded  husband 
and  wife  as  one,  and  that  "one"  the  husband.  It  was  allowed  to  take  from  the 
insured  notes  for  the  premium  in  part  or  for  the  whole  at  discretion,  and  in  case  just 
claims  at  any  time  exceeded  the  cash  on  hand  to  lay  assessments  on  the  notes  pro 
rata.     At  the  beginning  of  each  year  the  company  was  required  to  make  an  estimate 


INSURANCE   IN   CONNECTICUT.  63 

of  profits  and  of  the  true  state  of  affairs  for  the  previous  }ear,  to  charge  each  member 
with  a  proportionate  share  of  losses  and  exj^enses,  and  to  credit  him  witli  a  jjropor- 
tionate  share  of  profits.  Other  provisions  were  made  for  carr>'ing  out  the  system  of 
distribution  in  a  way  that  then  seemed  equitable. 

The  corporators  met  first  July  i6,  1846,  at  the  Eagle  Hotel,  and  adjourned  from 
time  to  time  till  July  29th,  when  the  company  was  organized  by  choice  of  the  fol- 
lowing directors,  viz. :  Thomas  K.  Brace,  Robert  Buell,  David  S.  Dodge,  Guy  R. 
Phelps,  Elisha  B.  Pratt,  Edson  Fessenden,  James  A.  Ayrault,  Eliphalet  A.  Bulkeley, 
Lorenzo  B.  Goodman,  Nathaniel  H.  Morgan,  Nathan  M.  Waterman,  and  Henry  L. 
Miller. 

August  nth  Eliphalet  A.  Bulkeley  was  chosen  president;  Guy  R.  Phelps,  secre- 
tary ;  and  David  S.  Dodge,  physician.  Elisha  B.  Pratt  was  subsequently  elected 
vice-president. 

The  board  met  frequentlj-,  but  for  several  months  made  little  progress.  As  the 
scheme  was  purely  mutual  they  saw  that  heavy  losses  in  the  infancy  of  the  associa- 
tion niight  crush  out  its  life  by  the  weight  of  assessments.  For  bridging  the  danger, 
and  thus  opening  a  sure  road  to  permanence,  they  decided,  as  permitted  by  the 
charter,  to  raise  a  guaranty  fund  of  ^50,000.  It  was  to  be  made  up  of  well-secured 
notes,  given  in  advance  for  premiums,  one-half  pa}able  fi\'e  and  the  other  half  ten 
5ears  from  date.  In  case  of  asssessments  the  makers  were  to  be  reimbursed  from 
premiums  earned  immediately  afterwards.  The  company  paid  for  the  credit  six  per 
cent,  annually.  Except  for  losses  and  assessments  previously  incurred  the  notes 
became  \-oid  at  the  end  of  their  respecti^•e  terms,  and  were  to  be  then  surrendered. 
Death  of  the  maker  operated  as  a  cancellation  for  future  liability.  A  like  rule 
applied  to  the  guarantor.  Provision  was  made  for  substituting  new  obligations  in 
place  of  those  withdrawn  by  cancellation  or  failure. 

The  plan  was  approved  December  1st,  and,  at  a  meeting  on  the  7th,  the  entire 
amount  was  apportioned  to  nineteen  subscribers,  in  sums  ranging  from  ;g4,ooo  to 
$1,000  each.  On  the  i  itli  of  the  same  month  the  board  voted  that  policies  might  be 
issued  to  aj^proved  parties,  as  applications  had  already  been  received  to  the  amount 
of  ^100,000.  Meanwhile  suitable  forms  and  literature  had  been  prepared  and  printed 
and  tables  of  premiums  adopted.  At  the  annual  meeting,  in  January,  1847,  James 
Goodwin  and  William  T.  Hooker  took  the  places  of  Messrs.  Phelps  and  Goodman  in 
the  directory.  The  work  of  appointing  agents  and  procuring  risks  was  pushed  with 
vigor,  not  over  $5,000  at  first  being  taken  on  a  single  life. 

The  first  Finance  Committee  to  which  the  by-laws  intrusted  the  care  and  invest- 
ment of  funds,  consisted  of  Messrs.  Bulkeley,  Goodwin  and  Hooker. 

Januan.'  6,  1 848,  James  Goodwin  was  elected  president,  and  James  A.  Ayrault 
was  appointed  actuar}-,  other  officers  remaining  as  before. 

Applications  for  insurance. were  all  submitted  to  the  full  board  of  directors. 
These  came  in  such  volume,  however,  that  in  January,  i  S48,  the  board  authorized  the 
officers  to  issue  policies  upon  unexceptionable  applications  presented  during  the 
recess  of  the  board,  upon  obtaining  the  approval  of  three  members,  of  whom  the  medi- 
cal examiner  must  be  one. 

The  following  March  Isaac  Toucey,  afterwards  governor,  United  States  senator 
and  secretary  of  the  navy,  was  appointed  first  legal  counsellor. 

The  first  serious  dissension  arose  over  the  rigid  economy  shown  by  the  executive 
officers  in  making  allowances  to  agents.  It  was  a  fixed  rule  to  pay  no  bills  incurred 
b>-  them  for  furniture,  fixtures,  stationer}-,  etc.,irnless  appropriations  had  been  spe- 
cifically asked  and  been  approved  by  the  board.     All  literature  emanated  from  the 


64  INSURANCE   IN   CONNECTICUT. 

home  office.  Agents  were  invited  to  send  in  any  matter  which  they  desired  to  see  in 
type,  and  were  told  that  if  approved  it  would  be  duly  incorporated  and  supplied  to 
them  gratuitously.  They  were  required,  however,  to  foot  printing  and  other  bills  if 
incurred  without  authority. 

N.  D.  Morgan,  agent  in  New  York  city,  grew  restive  and  resentful  under  the 
restrictions  imposed  upon  him.  Elisha  B.  Pratt,  in  charge  at  Boston,  was  also  dis- 
satisfied. In  anticipation  of  the  election  to  be  held  in  February',  1849,  they  made  a 
determined  effort  to  capture  the  company,  with  the  avowed  purpose  of  introducing  a 
more  liberal  and  expansive  policy.  But  the  garrison  holding  the  fort  was  not  asleep. 
December  i6th  a  vote  was  passed  to  notify  Mr.  Morgan  that  his  term  of  service  would 
expire  on  the  19th,  three  days  later.  A  powerful  minority  in  the  board  sympathized 
with  the  malcontents.  On  the  first  day  of  the  new  year  Messrs.  Brace,  Hooker,  Mil- 
ler and  Dodge  resigned  from  the  directory,  and  after  a  decorous  delay  their  resigna- 
tions were  accepted.  Mr.  Pratt  had  retired  the  previous  September,  and  the  follow- 
ing SeiDtember  he  gave  up  the  agency  at  Boston. 

The  election  was  hotly  contested.  Of  the  twenty-four  hundred  and  one  votes 
cast  James  Goodwin  received  twenty-three  hundred  and  ninety-seven.  The  rest  of 
the  successful  ticket  was  elected  by  majorities  of  about  two  hundred.  The  new 
board  consisted  of  James  Goodwin,  William  W.  Ellsworth,  Ebenezer  Flower,  Ed- 
mund G.  Howe,  George  Sumner,  Zephaniah  Preston,  Edwin  Tiffany,  Samuel  Wood- 
ruff, Simeon  L.  Loomis,  Mason  Gross,  William  E.  Dodge,  of  New  York,  and  John 
W.  Sullivan,  of  Boston.  Messrs.  Dodge  and  Sullivan  declined  to  ser\'e,  when  Henry 
Z.  Pratt,  of  New  Y'ork,  and  William  T.  Hooker  were  chosen  to  fill  the  vacancies.  A 
brief  war  of  circulars  was  followed  by  a  long  calm. 

In  the  partial  reorganization  that  ensued  Ebenezer  Flower,  sea  captain,  coal 
merchant  and  afterwards  mayor,  was  elected  vice-president.  Dr.  George  Sumner 
succeeded  Dr.  David  S.  Dodge  as  physician.  The  position  of  actuary  was  abolished. 
The  business  had  so  grown  that  the  board  now  authorized  the  employment  of  a 
bookkeeper,  clerk  and  office-boy. 

The  statement  for  the  3'ear  ended  January  31,  1850,  showed  that  over  six  hun- 
dred more  policies  were  issued  during  the  twelve  months  than  during  the  entire  pre- 
vious existence  of  the  company.  The  number  of  clerks  had  increased  to  four.  The 
annual  election  passed  without  a  ripple. 

The  guarantee  notes  were  retired  at  maturity  in  1S51  and  1856  respectively, 
having  by  their  mere  presence  in  the  treasury^  fulfilled  their  purpose  without  assess- 
ment of  any  kind. 

Till  the  outbreak  of  the  war  growth  was  more  solid  than  showy.  At  that  time 
the  company  had  about  three  and  one-third  millions  of  dollars  in  assets  and  about 
twenty-five  millions  at  risk.  It  had  already  won  the  confidence  of  the  public  and 
had  in  the  field  many  devoted  and  enthusiastic  workers.  In  one  western  city  after 
another  it  secured  correspondents  of  high  character  and  ability  to  act  as  loan  agents. 
As  the  transactions  were  eminently  profitable .  to  both  lenders  and  borrowers  the 
arrangement  brought  a  large  clientage,  and  by  aiding  the  development  of  the  coun- 
try continually  broadened  the  field  of  operations.  Not  less  popular  than  its  enter- 
prise in  offering  loans  were  its  unique  provisions  for  guarding  the  interests  of  women 
and  children. 

The  premium  note,  too,  jDroved  an  unexcelled  device  for  canvassing  purposes. 
Under  this  system  fifty  per  cent,  of  the  first  four  premiums  was  payable  in  a  note, 
bearing  six  per  cent,  interest,  which  was  made  a  policy  lien  and  was  deducted  from 
the  death  claim  by  the  terms  of  the  contract.     Limited  to  the  first  four  years,  the 


INSURANCE  IN    CONNECTICUT.  65 

method  made  it  easy  to  take  large  amounts  of  insurance  at  small  cost.  These  were 
extinguished  by  dividends  with  a  rajDidity  dependent  on  rates  of  interest.  Counted 
at  their  face  they  reached  a  maximum  of  $11,859,974  in  1870,  and  had  fallen  to 
$1,065,427.28  at  the  beginning  of  1897.  The  officers  have  always  regarded  the  notes 
as  an  excellent  asset.  These  were  unsatisfactory,  however,  to  claimants  who  wanted 
the  face  of  their  claims  in  cash.     This  was  one  reason  for  giving  up  the  system. 

In  1863  an  acrid  controversy  arose  between  William  Barnes,  superintendent  of 
the  insurance  department  of  New  York,  and  Secretary  Phelps,  with  regard  to  an  as- 
sumed failure  to  report  as  a  liability  dividends  to  policy-holders  provisionally  de- 
clared by  the  directors.  The  superintendent  went  so  far  as  to  threaten,  unless  his 
demands  were  complied  with,  to  decline  to  renew  the  certificate  of  the  company  al- 
lowing it  to  issue  new  policies  in  that  state.  The  subject  matter  of  dispute  is  of  far 
less  interest  than  the  defiant,  almost  contemptuous,  attitude  maintained  throughout 
by  Mr.  Phelps.  He  asked  no  favors,  courted  the  fullest  inquiry  and  met  insinuations 
with  scorn. 

A  few  years  later  a  successor  of  Mr.  Barnes,  in  wanton  disregard  of  decency,  let 
loose  upon  the  life  companies  of  New  York  a  swarm  of  bummers  under  pretense  of 
examining  their  condition.  For  alleged  investigations  these  foragers  presented  enor- 
mous bills,  which  were  paid  without  audible  protest.  It  was  notorious  that  most  of 
the  men  commissioned  to  go  on  the  raid  had  little  fitness  for  any  work  outside  of 
political  chicanery.  In  short,  the  scheme  began  and  ended  in  blackmail  pure  and 
simple.  Why  did  the  victims  submit  in  silence  to  imposition  and  robbery- ?  The 
question  has  been  often  asked,  biit  never  answered  "officially." 

We  may  infer  from  the  letters  of  Mr.  Phelps,  and  from  the  fearlessness  uni- 
formly shown  since  then  in  dealing  with  frauds  of  every  name  and  nature,  that  an 
expedition  fitted  out  at  Albany  to  assault  the  treasury  of  the  Connecticut  Mutual 
would  have  met  there  a  very  different  reception. 

Till  1869  the  company  returned  to  each  member,  without  regard  to  the  age  of  his 
policy,  a  uniform  percentage  of  the  premium,  thus  discriminating  in  favor  of  new- 
comers. Meanwhile,  keen  minds  penetrating  to  the  core  the  mathematical  intricacies 
of  the  subject,  detected  the  inequalities  of  existing  methods  of  distribution.  In  1 869, 
the  contribution  plan  devised  by  Shepard  Homans,  then  actuary  of  the  Mutual  Life 
of  New  York,  was  adopted.  Under  it  each  one  theoretically  receives  in  dividends  or 
return  premiums,  from  year  to  year,  precisely  the  share  that  his  payments  entitle  him 
to.  In  view  of  the  difficulty  of  combining  mutuality  with  strength  in  the  early 
stages  of  the  attempt,  the  system  has  been  accepted  by  competent  critics  as  a  close 
approach  to  perfect  equity,  and  has  been  everywhere  adopted  in  this  country. 

In  early  days  by  the  terms  of  the  contract  failure  to  pay  premiums  universally 
forfeited  the  policy.  Not  a  few  companies  reckoned  largely  upon  this  source  of 
revenue.  Many  persons  were  thus  subjected  to  great  hardships,  from  which  through 
change  of  fortune  they  could  not  escape.  In  1864  the  Connecticut  Mutual  volunta- 
rily changed  the  form  of  its  contracts  so  as  to  give  members  the  full  value  of  past 
premiums  in  paid-up  insurance,  where  they  found  it  inconvenient  to  continue. 

When  business  rebounded  after  the  first  shock  of  war  the  fruitfulness  of  wise 
seed-sowing  became  clear.  An  issue  of  one  thousand,  two  hundred  and  seventy-five 
policies  in  1859 — the  highest  record  up  to  that  time — fell  to  nine  hundred  and  fifty- 
nine  in  i860,  but  increased  to  five  thousand  and  ninety,  in  1863  ;  to  eight  thousand 
and  forty-five  in  1864;  and  to  fourteen  thousand,  one  hundred  and  fifty-one,  high 
watermark,  in  1867.  Meanwhile,  assets  had  increased  to  over  twenty-two  and  a 
half  millions.  The  amount  written  in  1867  reached  ^845,647, 191. 
5 


66  INSURANCE   IN  CONNECTICUT. 

Hartford  did  not  escape  the  speculative  mania  that  followed  the  outpour  of  paper- 
money  during  the  war.  Suburban  farms  were  bought  at  high  figures  and  on  charts 
laid  out  in  building  lots.  Prices  soared.  Others  caught  the  frenzy.  More  land  was 
bought  to  be  sold  to  new-comers  whom  heated  imaginations  saw  thronging  toward 
the  city.  By  and  by  the  balloon  wavered  in  its  upward  flight.  Something  must  be 
done.  Money  was  sorely  needed  to  sustain  the  weight.  One  after  another  asked 
loans  from  the  Connecticut  Mutual.  Was  it  not  the  duty,  they  asked,  of  a  Hartford 
institution  controlling  many  millions,  to  uphold  Hartford  interests?  Supported  by 
the  directory  Major  Goodwin  promptly  and  peremptorily  declined.  He  met  insistent 
appeals  by  showing  how  the  folly  must  inevitably  end. 

For  the  speculators  the  situation  was  desperate.  Quietly  and  secretly  they  formed 
plans  for  the  capture  of  the  company.  In  July,  1867,  they  procured  the  passage  by 
the  legislature  of  an  act  less  than  three  lines  long,  repealing  section  376  of  the 
revised  statutes,  and  thus  changing  the  mode  of  electing  directors.  Simultaneously 
they  scoured  the  country  for  proxies.  The  plot  was  discovered  only  a  few  days 
before  the  annual  election,  but  happily  in  time  to  frustrate  it.  In  view  of  the  relative 
claims  and  rights  of  the  two  parties  it  now  seems  incredible  that  the  attempt  so  nearly 
succeeded.  Separate  communities  and  the  country  have  suffered  imtold  evils  from 
heedless  legislation  pushed  through  to  promote  private  interests. 

Dr.  Phelps  was  secretary  till  1866,  and  president  thence  till  his  death  in  1869. 
Born  at  Simsbury,  Conn.,  he  graduated  at  the  Yale  Medical  School  in  1825,  and  after 
a  few  years  of  practice  in  different  places,  opened  a  popular  drug  store  in  Hartford. 
During  his  long  connection  with  the  Connecticut  Mutual,  he  aimed  to  make  the 
company  strong  and  rich. 

Except  during  the  brief  incumbency  of  Dr.  Phelps,  Major  James  Goodwin  was 
president  from  January,  i84S,  till  his  death,  March  15,  1S78.  Born  March  2,  1803, 
he  early  exhibited  great  aptitude  for  the  management  of  large  affairs,  having  while 
still  a  minor  become  owner  of  the  main  line  of  mail  stages  running  east  from  Hartford. 
In  association  with  others  he  extended  his  interests  till  most  of  the  lines  centering  in 
the  city  were  included.  He  quickly  foresaw  the  supersedure  of  the  stage  by  the 
railway,  and  changed  his  investments  accordingly.  He  was  largely  interested  also 
in  fire  insurance,  banking,  and  manufactures,  and  on  all  these  varied  lines  of  effort 
his  counsels  were  highly  valued.  Local  benevolent  and  educational  institutions, 
too,  profited  from  his  guidance  and  gifts.  He  married,  in  1832,  Lucy,  daughter  of 
Joseph  Morgan  and  sister  of  Junius  S.  Morgan,  long  a  leading  banker  of  London. 
For  thirty  years  Major  Goodwin  largely  directed  the  financial  polic}'  of  the  Connecti- 
cut Mutual  in  the  matter  of  loans  and  investments.  To  his  sagacity  it  is  greatly 
indebted  for  the  strong  position  which  it  won  early  and  has  easily  maintained.  He 
knew  personally,  and  accurately  measured  the  leading  financiers  of  both  the  East  and 
the  West,  and  was  thus  enabled  often  on  short  notice  to  make  large  and  advantageous 
purchases. 

For  the  most  part  the  executive  officers  of  the  company  have  served  till  death 
closed  their  labors.  Woodbridge  S.  Olmstead  succeeded  Mr.  Phelps  as  secretary  in 
1866,  and  died  in  1871.  Colonel  Jacob  L.  Greene,  for  whom  the  ofRce  of  assistant 
secretary  was  created  in  1870,  succeeded  Mr.  Olmstead  in  1S71  and  was  elected  presi- 
dent in  '78.  JohnM.  Taylor  was  assistant  secretary,  '7--'78  ;  secretary,  '78-'S4,  and 
has  been  vice-president  since '84.  Later  secretaries  have  been,  William  G.  Abbot, 
'84-' 89,  and  Edward  "SI.  Bunce,  '89-  ;  assistant  secretaries,  Daniel  H.  AYells,  William 
G.  Abbot,  and  John  D.  Parker.  Since  March,  1881,  Mr.  Wells  has  also  been  actuary, 
and  his  work  as  such  is  held  in  high  regard.     After  Mr.  Flower,  Edmund  G.  Howe 


GV\    K     I'llKI.l'S. 
President  1866-69. 


EDWARD  M.  UUNCE, 
Secretary. 


J.\C()r.  L.  GRKENE. 
President. 


J.\JIES  GOODWIN, 
President  1848-66;    1869-7S. 


JOHN  M.  '1  AYLOR, 
Vice-President. 


j;eorgf.  r.  shepherh 

Medical    Director. 


DANIEL  H,  WELLS, 
Actuary. 


THE  CONNECTICUT  MUTUAL  LIFE  INSURANCE  COMPANY. 


INSURANCE    IN   CONNECTICUT.  67 

was  vice-president,  '51-' 57;  Zephaniah  Preston,  '57-' 77;  Edward  B.  Watkinson, 
'78-'84.  Mr.  Watkinson  also,  as  chairman  of  the  committee  on  building,  supervised 
the  construction  of  the  home  office. 

Colonel  Greene  was  born  at  Waterford,  Me.,  August  9,  1837,  studied  at  ^^lichigan 
University,  and  began  the  jjractice  of  law.  Soon  after  came  the  war,  with  its  loud 
calls  for  young  men.  At  the  age  of  twenty-four  he  enlisted  in  the  Seventh  Michigan 
infantry,  and  except  when  on  a  sick  bed  or  in  southern  prisons,  served  in  the  Union 
arm}.-  till  one  year  after  federal  authority  was  fully  restored.  In  1863  he  was 
aj^pointed  assistant  adjutant-general  on  the  staff  of  General  Custer,  and  in  1865,  chief 
of  staff  to  the  same  commander.  April,  1866,  he  was  mustered  out  with  the  full 
rank  of  major  and  the  brevet  rank  of  lieutenant-colonel,  bestowed  for  distinguished 
gallantr}-.  Colonel  Greene  then  took  an  agency  for  the  Berkshire  Life  Insurance 
Company  of  Pittsfield,  Mass.,  and  was  soon  invited  to  join  the  office  staff  as  assistant 
secretary.  For  a  quarter  of  a  century  he  has  sers^ed  the  Connecticut  Mutual.  Colo- 
nel Greene  takes  an  active  interest  and  occasionally  an  aggressive  part  in  public 
affairs,  always,  in  seasons  both  of  calm  and  contention,  on  the  side  of  sound  morals, 
clean  politics,  and  good  government.  His  pen  has  enforced  the  use  of  correct  methods 
in  life  insurance,  and  has  mercilessl}- laid  bare  the  injustice  of  alluring  but  deceptive 
devices  for  entrapping  the  unwary.  In  March,  1896,  he  read  a  paper  before  the 
Hartford  Board  of  Trade  on  "  Our  Currency  Problems,"  of  which  over  one  hundred 
and  ninety  thousand  copies  were  circulated,  largely  through  the  South  and  West. 
During  the  troubles  that  have  sprung  from  tampering  with  the  currenc)-,  he  has  been 
a  stalwart  leader  in  exposing  the  heresies  wrapt  up  in  the  pretensions  of  fiat  monev. 

Mr.  Taylor  was  born  of  New  England  parentage  at  Cortland,  N.  Y.,  February  18, 
1845,  graduated  with  class  and  scholarship  honors  in  1867,  at  Williams  College,  and 
was  admitted  to  the  bar  in  1870,  when  he  opened  an  office  in  Pittsfield,  Mass. 
Incidentally  he  was  elected  town  clerk,  clerk  of  the  district  court,  and  to  other  positions. 
He  gave  up  a  career  at  the  bar  to  link  his  fortunes  with  the  Connecticut  Mutual,  but 
the  connection  has  been  happ}-  for  both  parties.  Thorough  legal  training  at  the 
outset  reinforced  by  familiarity  with  current  legislation  and  court  decisions  affecting 
insurance,  exact  knowledge  of  principles  and  mastery  of  details,  long  ago  made  him  a 
trusted  and  authoritative  guide  through  the  changeful  complexities  that  continually 
arise.  To  the  general  management  he  has  contributed  his  full  store  of  thought  and 
responsibility.  Mr.  Taylor  has  decided  literary  and  critical  ability  as  shown  by  his 
recent  historical  work,  "Maximilian  and  Carlotta,  a  Story  of  Imperialism." 

The  Connecticut  Mutual  is  peculiarly  strong,  not  only  in  solid  assets,  but  in  a 
conservatism  of  policy,  the  wisdom  of  which  will  become  more  and  more  apparent 
with  the  lapse  of  time.  Its  premiums  and  reserves  upon  risks  taken  since  April, 
1882,  are  computed  on  the  assumption  that  before  the  liabilities  mature,  safe  invest- 
ments cannot  with  certainty  be  depended  upon  to  yield  a  yearh-  net  income  of  over 
three  per  cent,  instead  of  four  per  cent.,  the  basis  heretofore  required  in  prudent 
legislation  and  estimates.  When  taken,  the  step,  quite  at  variance  with  the  prevalent 
tendency,  provoked,  in  certain  quarters,  acrid  criticism,  but  its  justification  came 
more  quickly,  perhaps,  than  its  advocates  foresaw.  The  discussion  drew  from  able 
economists  elaborate  papers  to  prove  that  for  a  generation,  at  least,  the  annual  rate 
of  interest  in  the  United  States,  except  for  short  and  transient  intervals,  could  not 
fall  below  six  per  cent.  The  arguments  were  based  upon  the  extent  of  our  unde- 
veloped and  partially  developed  territory,  the  tireless  energ}'  of  our  people,  and  the 
enormous  sum  certain  to  be  required  both  for  the  enlargement  of  old  and  the  initia- 
tion of  new  enterprises.     In  reality,  capital  increases  much  more  raj^idh'  than  the 


68  INSURANCE   IN  CONNECTICUT. 

demand  for  it  in  safe  investments.  In  a  panic  the  rate  may  mount  tipward  according 
to  the  necessities  of  the  borrower.  During  the  last  decade,  on  the  contrary,  call  loans 
on  the  best  security  have  ranged  for  months  at  a  time  from  one  per  cent,  a  year  to  a 
fraction  above,  while  much  of  the  time  United  States  and  some  state  bonds  have 
yielded  less  than  the  assumption  of  the  company  requires.  Nothing  but  a  long  and 
destructive  war  can  arrest  except  temporarily  the  downward  movement.  In  view 
of  the  further  fact  that  life  insurance  contracts,  in  many  instances,  will  run  fifty  or 
sixty  years,  and  that  every  one  kept  in  force  must  be  provided  for  at  the  outset  and 
ultimately  be  paid  in  full  on  penalty  of  bankruptcy,  it  is  easy  to  see  that  all  similar 
institutions,  to  meet  remote  obligations,  must  follow  in  practice,  if  not  avowedly,  the 
example  first  set  by  the  Connecticut  j\Iutual. 

On  the  highly  improbable  assumption,  that  the  destruction  of  capital  in  waste- 
ful wars  should  restore,  for  a  long  period,  former  rates  of  interest,  and  thus  postpone 
the  necessity  for  revising  the  tables  of  cost,  patrons  of  the  company  would  reap  the 
entire  benefit  in  the  way  of  larger  dividends.  In  case  the  accumulation  of  wealth, 
with  the  attendant  decrease  of  income,  goes  on  without  interruption,  they  are  fully 
protected,  and  in  case  the  natural  order  of  economical  development  is  suspended  or 
temporarily  reversed,  they  lose  nothing  by  the  changes  introduced  in  preparation  for 
the  seemingly  inevitable. 

In  1 87 1-2  several  ambitious  companies  that  had  pushed  their  business  at  such 
an  expense  as  to  affect  their  dividends  very  unfavorably  when  compared  with  those 
of  more  conser\-ative  competitors,  revived  the  "tontine"  scheme  under  which 
insurers  agreed  to  forego  all  dividends  for  ten  to  twenty  years  and  pay  full  premiums. 

Those  who  died  during  the  term  lost  such  surplus  as  had  accumulated  up  to  the 
time,  and  those  Avho  ceased  to  pay,  no  matter  when,  lost  everything.  It  was  repre- 
sented that  the  forfeitures  arising  from  the  two  sources  would  make  a  very  large  sum 
in  addition  to  the  face  of  the  policy,  to  be  divided  among  the  select  few  who  perse- 
vered till  the  end  of  the  period. 

The  Connecticut  ^Mutual,  with  unanswerable  logic,  pointed  out  the  injustice  of 
the  scheme,  taking  the  ground  that  as  the  surplus  accrued  from  year  to  year  it  ought 
to  be  used  to  aid  in  keeping  the  policy  in  force,  and  in  case  of  lapse,  that  the  reserves 
were  entitled  to  an  eqivalent  value  of  paid-up  insurance.  If  the  plan  Avas  carried  out 
faithfully  it  simply  meant  the  robbery  of  the  many  for  the  benefit  of  the  few,  and 
hence  pushed  a  demoralizing  speculation  into  sacred  ground  that  should  be  kept  free 
from  such  intrusion. 

Even  as  a  contrivance  for  enriching  the  fortunate  at  the  expense  of  the  unfortunate 
the  devise  has  proved  a  failure,  for  as  the  policies  are  now  falling  due  the  holders  are 
receiving  less  than  forty  per  cent,  of  the  profits  which  were  promised  by  way  of 
temptation.  Where  the  balance  has  gone,  raises  another  question  yet  to  be  answered 
"officially."  Costly  business  blocks  built  by  the  companies  in  different  quarters  of 
the  globe,  that  may  excite  the  wonder  of  beholders,  but  for  the  most  part  yield 
scant  returns  on  the  outlay;  large  salaries  to  many  employees;  and,  in  short,  a 
heavy  ratio  of  expenses — indicate,  in  part,  where  the  other  sixty  per  cent,  may  be 
looked  for. 

Prior  to  January  i,  1897,  the  Connecticut  Mutual  had  received  : 

For  Premiums $192,111,805.65 

"   Interest 76,438,281.19 

"   Rents 7,059,292.87 

"   Profit  and  loss 1,035,219.59 

Total $276,644,599.30 


insurancp:  in  Connecticut.  69 

« 

DISBURSED. 

For  Death  claims  and  endowments 5102,683,616.37 

"    Dividends 55,966,763.64 

"   Surrendered  policies 23,803,729.92 

Total  paid  policy-holders $182,454,109.93 

Expenses 24,316,102.41 

Taxes 8,892.715.35 

Total 5215,662,92769 

Ledger  assets,  January  i,  1S97 60,981,671.61 

Xet  surplus §7,153,297.04 

The  surplus  would  be  over  a  million  of  dollars  more  if  wholly  computed  on  the 
legal  standard  of  4  per  cent.  On  tables  in  use  since  April,  1882,  the  company  has 
assumed  3  per  cent,  as  the  rate  of  interest  on  accumulations  accruing  after  that  date. 
In  the  management  of  the  Connecticut  IMutual,  one  is  impressed  by  the  thorough- 
ness and  equity  with  which  principles  are  studied  and  applied. 

Edward  M.  Bunce,  secretary,  was  born  in  Hartford  in  1841,  educated  at  the  Hart- 
ford Public  High  School,  and  on  graduation  was  appointed  clerk  in  the  Phcenix 
Bank,  where,  having  served  under  the  state  and  national  systems,  as  teller,  assistant 
cashier  and  cashier,  was  elected  a  director  in  the  Connecticut  Mutual  Life  in  1878, 
and  its  secretary  in  1 8S9. 

Daniel  H.  Wells  was  born  at  Riverhead,  L.  L,  in  1S45  ;  graduated  at  the  Yale 
Sheffield  Scientific  School  in  the  class  of  1867  with  the  degree  of  C. E.,  later  receiv- 
ing the  degree  of  Ph.B. ,  and  remaining  there  as  instructor  in  mathematics  and  engi- 
neering for  seven  5-ears.  In  i  S74  he  became  a  clerk  in  the  actuarial  department  of  the 
Connecticut  Mutual;  was  placed  in  charge  in  1876  as  second  assistant  secretary ; 
was  elected  assistant  secretary  in  1878,  and  actuary  of  the  company  in  1881. 

John  D.  Parker  was  born  in  Pittsfield,  I\Iass.,  in  1850  ;  educated  in  the  Pittsfield 
High  School ;  joined  the  clerical  force  of  the  Berkshire  Life  Insurance  Comjjany  in 
1866,  and  after  five  years'  ser\'ice  there,  was  appointed  clerk  in  the  Connecticut 
Mutual  Life  Insurance  Company  in  1871  ;  chosen  second  assistant  secretary  in  1S89, 
and  assistant  secretary  in  March,  1890. 


CHAPTER    VIII. 

INS UR  A  NCE    IX    CO NNE  C  TI C U T—  Continued. 

THE    AMERICAN    MUTUAL    LIFE    INSURANCE   COMPANY,    AND   THE   AMERICAN 
N.ATIONAL   LIFE   AND  TRUST   COMPANY  (nEW   HAVEn). 

HIS  company  was  incorporated  in  1847.  Six  commissioners  were  authorized 
to  open  books  aud  receive  applications  for  insurance  to  be  effected,  not  to 
exceed  ;$5,ooo  upon  the  life  of  any  one  person,  and  when  the  amount 
reached  $100,000,  to  call  a  meeting  at  New  Haven  for  the  purpose  of  orga- 
nizing and  electing  a  board  of  trustees,  every  member  to  have  one  vote  on 
each  $500  applied  for. 

Benjamin  Silliman,  an  honored  professor  in  Yale  College,  was  elected  president, 
and  Benjamin  Noyes,  secretar\-.     Tables  fixing  the  rates  to  be  charged  for  insurance 


70  INSURANCE   IN  CONNECTICUT. 

on  lives  generally  assiimed,  in  the  earlier  days  of  the  business,  that  an  income  of  at 
least  4^2  per  cent,  per  annum  could  be  realized  on  the  accumulations  made  up  of 
premiums  and  interest.  If  through  good  investments  higher  rates  were  obtained, 
the  excess  was  so  much  clear  profit,  either  to  be  added  to  the  reserves,  or  to  be 
returned  in  dividends  to  the  insured.  As  loanable  funds  increased,  it  was  found  that 
the  estimate  was  too  high.  States  like  INIassachusetts,  New  York  and  Connecticut 
long  ago  reduced  the  limit  by  law  to  4  per  cent.,  while  far-seeing  managers  have  for 
some  time  been  recasting  their  tables  on  a  still  more  conservative  basis. 

The  American  Mutual,  however,  started  on  the  dangerous  assumption  that  it 
could  realize  at  least  six  per  cent,  on  all  funds  in  the  treasury.  On  that  theory  it 
made  contracts  liable  to  run  in  some  cases  for  half  a  century.  Whenever,  from  any 
cause,  the  average  rate  of  interest  on  the  combined  assets  fell  below  six  per  cent.,  a 
loss  arose  that  could  only  be  charged  against  principal.  In  long  periods  the  margin 
of  two  per  cent,  placed  at  compound  interest  produces  quite  astonishing  results. 
On  annual  payments  of  $100,  the  difference  amounts  in  twenty-five  years  to  $1,484, 
and  in  fifty  years  to  $14,898.  The  company,  too,  made  up  a  table  of  mortality  less 
conservative  than  those  now  in  use.  Low  rates  and  the  world-wide  fame  of  the 
president  gave  the  American  Mutual  a  good  start.  In  1855  it  claimed  to  have 
1:4,960,450  insured  by  existing  policies,  although  the  following  year  the  amount  had 
fallen  to  $3,500,000.  Its  annual  statements  puzzled  the  newly-created  insurance  bu- 
reaus of  Massachusetts  and  New  York.  The  commissioners  of  Massachusetts,  in  the 
report  of  January,  1858,  treat  the  valuation  of  $30,000  put  on  existing  policies  as 
"  evidently  guesswork  and  not  deemed  reliable."  The  next  j-ear  its  statement  first 
came  under  the  searching  scrutiny  of  Elizur  Wright,  who  brought  to  the  office  great 
technical  knowledge,  integrity  and  courage.  From  his  eye  vagueness  could  not  hide 
absurdity  in  estimates.  He  failed  to  see  how  five  millions  at  risk  could  be  transferred 
to  a  reliable  company  for  a  "sum  not  exceeding  $37,500,"  as  claimed  in  the  state- 
ment. To  his  mind  the  figures  were  given,  "  not  as  the  result  of  any  calculation  or 
investigation,  whatever,  but  of  wholesale  conjecture."  Considering  the  age  of  the 
company  and  the  amount  at  risk,  he  was  inclined  to  believe  that  no  other  company 
would  be  justified  in  taking  its  risks  for  $162,212.98 — the  whole  amount  of  its  net 
assets.  At  the  same  time  he  suggests  that  there  may  be  some  peculiarity  in  its  busi-' 
ness  to  relieve  it  of  suspicion.  This  much  is  conceded  "out  of  regard  to  the  venerable 
gentleman  who  has  stood  at  its  head,  and  whose  name  has  been  its  chief  tower  of 
strength — a  name  dear  to  the  whole  world  for  his  noble  zeal  and  eloquence  in  the 
cause  of  science  and  humanity." 

In  1862  the  company  was  excluded  from  doing  business  in  the  state  of  New 
York,  where  it  then  had  ten  agents.  For  a  long  period  Commissioner  Wright  dealt 
with  it  very  tenderly  out  of  regard  for  its  distinguished  president.  He  was  at  a  loss 
to  see  how  reports,  hazy,  indefinite  and  strained  could  be  fathered  by  a  gentleman 
trained  to  exact  methods  of  science,  and  known  to  be  scrupulously  correct  in  every 
relation  of  life.  He  knew  that  no  taint  of  mercenary  motive  could  stain  the  charac- 
ter of  one  who  had  devoted  splendid  talents  and  incessant  toil  to  the  cause  of  truth 
and  popular  education.  But  at  length  the  suspicion  ripened  into  conviction  "  that 
men  of  science  may  misplace  their  confidence  in  the  science  of  others,"  and  he  goes 
on  to  show  that  the  calculations  avowedly  made  by  Benjamin  Noyes  for  the  sworn 
return  deposited  with  the  department,  October  30,  1852,  involve  gross  and  palpable 
impossibilities. 

Professor  Silliman  died  in  1864.  For  a  short  term  Willis  Bristol  held  the  presi- 
dency, and  was  succeeded  by  Mr.  Noyes,  who  had  held  uncontrolled  sway  from  the 


IXSURANXK   IX   COXXECTICUT.  71 

start.  Ill  1S65  an  insurance  department,  with  limited  fnnctions,  was  established  in 
Connecticut.  Benjamin  Noyes  was  appointed  first  commissioner.  He  held  the  place 
till  1S71,  when  the  department  was  reorganized  with  much  broader  duties  and 
powers.  Thus  the  American  Mutual  enjoyed  double  services  from  the  same  person. 
The  wisdom,  however,  of  hiring  an  official  to  watch  himself  is  yet  to  be  proved. 
Although  shut  out  from  Massachusetts  and  Xew  York,  within  the  jurisdiction  of 
Connecticut  he  could  manipulate  figures  iinder  authority  of  the  commonwealth, 
applying  methods  and  tests  which  were  wholly  his  own.  In  his  report  to  the  legis- 
lature in  1S67 — the  first  embracing  home  institutions — he  presented  a  table  to  prove 
inferentially  that  the  American  Mutual  was  by  far  the  strongest  of  the  eight  life  com- 
panies then  doing  business  under  charters  from  the  state.  But  it  is  useless  to  waste 
words  in  refuting  manifest  absurdities. 

In  1 87 1  an  act  was  worked  through  the  General  Assembly  authorizing  the  com- 
pany to  lease  land  from  Trinity  Church,  New  Haven,  and  to  erect  thereon  such 
building  or  buildings  as  should  be  deemed  expedient.  Under  the  permission  thus 
granted  much  the  larger  part  of  its  available  assets  was  soon  solidified  in  brick  and 
mortar.  It  was  carried  on  the  books  at  ^350,000,  while  the  lease  was  claimed  to  add 
^50,000  more  to  the  value  of  the  property. 

Mr.  Noyes  appreciated  the  commercial  value  of  nominal  connections  with  men 
of  high  character  and  wide  reputation.  The  more  engrossing  their  labors  the  better, 
for  other  activities  would  then  leave  little  leisure  for  prying  into  secrets  of  manage- 
ment. For  his  purposes  Professor  Sillimau  made  an  ideal  figure-head.  Too  noble 
and  truthful  to  suspect  trickeiy  and  falsehood  in  an  associate,  and  too  busy  with  pur- 
suits that  delighted  his  heart  to  descend  to  the  details  of  money-making,  he  was  con- 
tent to  be  an  apparent  leader  in  life  insurance  from  a  conviction  that  the  work  was 
essentially  beneficent.  From  time  to  time  excellent  men  were  also  placed  on  the 
board,  but,  so  far  as  the  company  was  concerned,  they  were  expected  to  look  wise  and 
know  nothing. 

Rarely,  by  mistake,  persons  were  selected  who  declined  to  be  hj-pnotized.  Prof. 
A.  C.  Twining,  of  Yale  College,  a!i  influential  trustee,  dissatisfied  with  the  loose 
methods  and  indefinite  reports  of  the  secretary,  urged  his  associates  to  apply  the 
curb.  By  a  flank  attack  he  was  driven  from  the  board.  He  also  tried  to  procure  a 
legislative  inquiry,  but  was  easily  bafiled  by  his  wilj'  adversary. 

When  Joseph  G.  Lamb  resigned  the  agency  at  Norwich,  Mr.  Noyes  engaged  John 
L-  Dennison  to  collect  premiums  on  renewals  in  the  town  and  its  vicinit\'.  In  for- 
warding the  receipts  he  added  that  policy-holders  had  from  time  to  time  received 
dividends  in  scrip  representing  surplus  earnings,  and  asked  him  to  collect  all  in  that 
section  and  return  the  same  to  the  home  office  with  his  next  monthly  statement. 
Mr.  Dennison,  from  whose  training  the  art  of  reaching  ends  by  devious  paths  had 
been  omitted,  paid  the  holders  the  face  value  out  of  his  collections  and  reported 
accordingly.  Mr.  Noyes  was  much  displeased.  He  wrote,  "  I  never  intended  }ou 
to  pay  the  scrip-holders.  The  object  was  upon  their  return  to  me  to  consolidate  the 
various  pieces,  and  issue  a  form  of  obligation  which  would  be  of  the  same  relative 
value  to  the  holders  at  maturity."  He  also  requested  Mr.  Dennison  to  forward  the 
amount  paid  in  cash  in  order  properly  to  settle  his  account. 

]\Ir.  Dennison  replied  that  the  office  had  sent  no  blank  to  be  filled,  and  given  as 
a  voucher  to  be  held  during  the  exchange,  or  even  mentioned  the  proposed  substitu- 
tion. Hence  he  had  but  one  way  of  obtaining  the  script,  and  that  by  paying  for  it. 
The  explanation  brought  no  answer.  IMr.  Noyes  acted  on  the  theor)-  that  to  sophis- 
ticate the  form  of  an  obligation  was  the  easiest  wav  to  get  rid  of  it. 


72  INSURANCE    IN    CONNECTICUT. 

In  iS/O  several  leading  citizens  of  Norwich,  policy-holders  in  the  company,  in  a 
commnnication  printed  over  their  na\nes  in  the  A ih'er/iser,  made  an  outspoken  attack 
on  the  management.  Mr.  Noyes  hurried  over  to  cpiiet  the  disturbance.  Some  of  the 
interviews  took  a  decidedly  personal  turn,  and  he  was  forced  to  listen  to  plain  talk. 
At  length  the)'  finally  agreed,  as  perhaps  the  liest  way  out  of  a  bad  fix,  to  sell  their 
policies  at  fifty  per  cent,  of  the  amount  paid  in  to  Dr.  J.  B.  Robertson,  vice-president 
of  the  company. 

As  the  American  Mutual  Life  had  long  rested  under  a  cloud,  various  plans  were 
considered  by  the  managers  for  getting  rid  of  the  discredit  without  sacrificing  the 
assets  and  business.  In  pursuance  of  the  scheme  they  came  before  the  legislature  of 
Connecticut  in  1 866,  and  secured  the  passage  of  an  act  incorporating  The  American 
National  Life  Insvirance  Company.  The  capital  stock  was  to  be  not  less  than  $ioo,- 
ooo,  with  the  privilege  of  increase  at  the  pleasure  of  the  directors  to  ^500,000.  The 
subscribers  were  required  to  pay  the  amounts  subscribed  for,  "  in  such  installments 
as  the  directors  shall  order  and  direct."  As  subsequently  construed,  this  provision 
was  assumed  to  authorize  the  company  to  begin  and  continue  business  with  no  paid 
capital  whatever.  Similar  latitude  of  phraseology  runs  through  the  entire  document. 
Section  7  begins,  "The  capital  stock  and  the  accumulations  of  said  company  may 
be  invested  in  mortgages  upon  real  estate  worth  double  the  amount  loaned,"  etc. 
In  other  words,  the  managers  were  permitted,  if  it  suited  their  purposes,  to  invest  in 
sundry  classes  of  good  securities,  but  the  permission  was  not  coupled  with  any  obli- 
gation or  penalt)'.  The  company  was  authorized  to  accept  and  execute  any  and  all 
trusts  that  might  be  committed  to  it  by  any  court,  or  person,  or  persons,  whatso- 
ever, and  to  "  assume  or  to  reinsure  any  risks  involving  the  casualties  of  life,  either 
separately  or  otherwise."  The  last  clause,  half  hidden  under  the  shadow  of  inno- 
cent privileges,  embodied  the  essence  of  all  that  was  sought  for. 

Section  6  allowed  dividends  to  be  paid  "  in  cash  or  scrip,  or  in  stock,  or  in  new 
policies  of  insurance,  or  (to)  be  added  to  old  ones.  It  was  the  original  plan  to  draw 
from  the  treasury  of  the  American  Mutual  Life  the  funds  needed  to  pay  for  the  capi- 
tal stock  of  its  offspring.  At  the  next  session  of  the  General  Assembly  the  charter 
of  the  old  company  was  so  amended  as  to  authorize  it  to  loan  on  vague  and  illusive 
conditions  to  the  individual  members  of  its  board  the  amount  required  to  pay  for 
such  shares  in  the  new  company  as  they  might  subscribe  for.  That  Benjamin  Noyes 
and  his  associates  could  obtain  from  successive  legislatures  the  authority  to  handle 
without  restriction  trust  funds  of  the  most  sacred  character,  is,  perhaps,  not  so  much 
an  evidence  of  confidence  in  their  integrity  as  of  their  adroitness  in  effecting  com- 
binations for  political  and  other  purposes. 

A  long  period  of  gestation  followed.  In  1871  the  cor[)orate  name  was  changed 
to  "The  American  National  Life  and  Trust  Compan)'."  The  following  September 
stock  subscriptions  to  the  amount  of  $125,000  were  entered  on  a  sheet  provided  for 
the  purpose,  and  an  organization  was  consummated  by  electing  as  its  officers  the 
officers  of  the  American  Mutual  Life.  Benjamin  Noyes,  president,  and  Richard  F. 
Lyon,  secretary'. 

The  larger  part  of  the  subscriptions  were  made  in  the  name  of  sundry  persons 
by  B.  No)-es,  "attorney."  A  little  in  the  same  line  was  done  by  R.  F.  Lyon,  "at- 
torney." Willis  Bristol,  treasurer,  in  trust  for  the  company,  took  one  hundred  and 
twenty  shares,  which  were  afterwards  vacated  b\-  vote  of  the  board.  Then  came 
another  long  and  involuntary  dela^■.  The  annual  statement  of  the  American  ^Mutual 
Life  for  December,  1871,  as  made  uj)  in  the  home  office,  showed  a  deficiency  of 
;g  18,678.84.     Dr.  George  S.  Miller,  the  first  regular  insurance  commissioner  of  Con- 


INSURANCE   IN   CONNECTICUT.  73 

necticnt,  as  directed  by  the  Act  of  1871,  creating  the  office,  notified  the  company  to 
cease  the  issne  of  new  policies  and  tlie  payment  of  (li\idends  till  the  impairment 
should  be  made  good.  Accordingly  a  "guaranty  capital,"  so  called,  of  S75,ooo  was 
subscribed  to  fill  the  gap  in  the  early  part  of  1873.  About  the  same  time,  as  per- 
mitted by  a  .special  act  jjassed  in  1871,  the  state  treasurer  surrendered  to  the  Ameri- 
can National  Life  and  Trust  Company,  the  securities  deposited  with  him  by  the 
American  Mutual  Life,  in  exchange  for  an  equal  amount  substituted  by  the  former. 

As  a  part  of  the  same  transaction  the  new  company  assumed  all  the  liabilities  of 
the  old  one  and  took  its  entire  assets,  including  the  guaranty  capital.  In  spite  of 
many  difficulties  the  transmigration  was  complete.  A  soul  had  so  passed  from  one 
body  to  another  that  the  closest  observer  from  external  appearances  would  never  have 
suspected  the  fact.  Nothing  visible  was  changed  except  the  title.  Not  only  assets 
and  liabilities,  but  the  premises  occupied,  the  management  and  atmosphere  remained 
the  same.  After  an  examination  of  its  condition  in  April,  1873,  Commissioner  Mil- 
ler gave  the  company  a  license  to  issue  policies  and  transact  business. 

As  it  was  brought  into  being  with  the  primary  purpose  of  absorbing  dead  and 
dying  institutions,  it  lost  little  time,  after  swallowing  its  parent,  in  hunting  for  the 
next  meal.  The  following  December  it  reinsured  the  risks  of  the  National  Life  of 
New  York,  which  had  failed  in  October.  The  bargain  was  bad  in  every  way,  the 
buyer  getting  little  and  assuming  much.  Among  the  securities  assigned  were  bonds 
to  the  amount  of  ^100,000,  deposited  with  the  superintendent  of  insurance  at  Albany. 
It  was  to  get  hold  of  these  that  the  trade  was  made.  Here  Mr.  Noyes  met  unex- 
pected difficulties.  His  manipulations  as  lobbyist  in  his  own  state  had  given  him 
great  confidence  in  his  prowess.  But  he  was  now  manceuvering  on  imfamiliar 
ground.  The  superintendent  was  deaf  equally  to  demands  and  entreaties,  success- 
fully claiming  that  the  bonds  could  not  be  used  for  any  other  purpose  than  the  pro- 
tection of  policy-holders  of  the  bankrupt  company  in  that  state.  Aside  from  the 
deposit  of  $105,500  (including  excess  of  price  over  par)  retained  by  the  superintend- 
ent, the  concern  had  the  December  before  only  $18,208.97,  made  up  of  cash  and  ac- 
crued interest,  available  for  the  payment  of  losses.  The  balance  out  of  a  total  of 
$760,034.87  of  assumed  assets  consisted  of  premium  notes,  loans  on  policies  in  force 
and  Tinpaid  premiums.  At  the  same  time  the  liabilities  reached  $760,034.87.  Had 
the  New  York  superintendent  given  up  the  deposit,  the  contract  of  reinsurance  would 
still  seem  an  act  of  madness. 

John  W.  Stedman,  second  insurance  commissioner  of  Connecticut,  served  two 
terms,  having  been  appointed  by  Gov.  Charles  R.  IngersoU  and  reappointed  by  Gov. 
Richard  D.  Hubbard.  He  entered  upon  the  duties  of  the  office  in  July,  1S74.  Com- 
plaints from  the  beneficiaries  of  deceased  policy-holders  in  the  American  National  Life 
and  Trust,  and  from  others,  came  with  alarming  frequency.  Proof  accumulated  in  his 
hands  to  indicate  that  the  company  was  pursuing  vigorously  the  system  of  freezing 
out  old  policy-holders  and  of  compromising  death  claims  on  the  hardest  terms  pos- 
sible. Some,  in  ignorance,  submitted,  taking  whatever  they  could  get.  Others 
directly  or  through  friends,  sent  to  the  department  for  advice.  Mr.  Stedman  felt 
that  he  would  be  criminally  negligent  if  he  allowed  such  practices  to  continue  with- 
out inquiry  or  rebuke.  Accordingly,  beginning  on  the  20th  of  October,  with  the  aid 
of  several  experts,  he  made  an  exhaustive  examination  of  the  condition  of  the  com- 
pany and  a  revaluation  of  the  liabilities  on  all  outstanding  policies.  The  resulting 
statement  showed  its  condition  on  the  first  day  of  October,  1874. 

Putting  upon  the  famous  building  erected  on  Chapel  street  a  much  higher  esti- 
mate than  was  realized  in  the  final  settlement,  he  made  the  total  assets  $923,220.71, 


74  INSURANCE   IN  CONNECTICUT. 

the  liabilities  gi, 335,068. 28,  and  the  deficiency  $411,847.57.  Among  the  assets  he 
included  the  bonds,  now  valued  at  $108,000,  which  were  deposited  with  the  superin- 
tendent at  Albany  and  which  never  did  or  could  come  into  the  hands  of  the  New 
Haven  company.  He  disallowed  the  following  items,  and  over  them  a  fierce  contest 
arose : 

Capital  stock  unpaid $84,700 

Guarantee  capital 75i°oo 

Agencies  balances 15,706 

Virginia  Coal  Company  stock 26,600 

$202,006 

Section  28  of  the  act  of  1871  provides  that  if  on  examination  by  the  commis- 
sioner, the  assets  of  any  company  chartered  by  this  state  to  grant  insurances  or 
make  contracts  contingent  upon  lives,  are  less  than  its  liabilities,  the  commissioner 
shall  forthwith  notify  such  company  to  cease  the  issue  of  new  policies  and  the  pay- 
ment of  dividends  until  the  deficiency  shall  be  supplied,  or  at  his  discretion  he  may 
apply  to  the  local  court  of  probate  for  an  appointment  of  a  trustee  to  take  possession 
of  the  property  for  the  benefit  of  the  creditors. 

Section  29  further  provides  that  if  the  assets  are  less  than  three-fourths  of  the 
liabilities  the  commissioner  shall  without  delay  bring  petition  as  above,  and  the 
court  shall  thereupon  appoint  a  trustee.  It  also  prescribes  the  further  steps  to  be  taken 
to  accomplish  the  dissolution  of  the  company. 

As  the  deficiency  exceeded  twenty-five  per  cent.,  no  discretion  was  allowed  the 
commissioner.  He  therefore  applied  to  the  court  of  probate  for  the  district  of  New 
Haven  for  the  appointment  of  a  trustee  to  take  possession  of  the  property  and  wind 
up  the  affairs  of  the  company.  At  the  first  hearing  the  application  was  resisted  on 
the  ground  that  the  law  was  imconstitutional.  The  plea  was  overruled  and  a  trial 
ordered  on  the  merits  of  the  case.  After  some  delay  the  hearing  began  January  18, 
1875,  before  Judge  Bradley  of  the  Probate  Court,  assisted  by  Judge  Phelps  of  the 
Superior  Court,  and  closed  March  19th.  Various  adjournments  reduced  the  time 
actually  consumed  to  twenty  days.  The  court  decided,  April  1 2th,  that  the  allega- 
tion in  the  petition  that  the  assets  were  less  than  three-fourths  of  the  liabilities  was 
untrue,  that  the  allegation  that  the  assets  were  less  than  the  liabilities  was  true,  and 
that  the  deficiency  was  not  such  that  the  prayer  should  be  granted.  Accordingly 
the  petition  was  dismissed,  the  court  giving  no  hint  of  its  opinion  regarding  the 
value  of  the  property  owned  by  the  company,  or  of  the  amount  of  deficiency.  Up 
to  this  point  Henry  B.  Harrison,  afterwards  governor,  prosecuted  the  case  in  behalf 
of  the  state.  He  was  so  astounded  and  shocked,  however,  at  the  outcome  that  he 
withdrew  peremptorily  from  any  further  connection  with  it.  He  was  succeeded  by 
Simeon  E.  Baldwin,  now  on  the  bench  of  the  Supreme  Court  of  Connecticut,  who 
with  great  ability  and  unfaltering  persistence  conducted  the  case  to  the  end.  Let  us 
examine  the  situation  in  the  light  of  the  evidence. 

The  guaranty  capital  of  $75,000  was  an  inheritance,  as  already  narrated,  from 
the  American  Mutual  Life,  and  was  made  up  in  order  that  the  process  of  absorption 
might  proceed  in  apparent  accordance  with  law.  In  a  contract  between  the  trustees 
of  the  company  and  the  subscribers,  dated  March  15,  1873,  it  was  agreed  that  the 
company  should  pay  six  per  cent,  per  annum  interest  on  the  several  subscriptions, 
that  the  fund  should  not  be  used  or  resorted  to  unless  all  the  resources  of  the  com- 
pany were  exhausted,  that  all  income  derived  from  the  securities  transferred  from 
private  hands  to  make  up  the  amount,  should,  when  collected  by  the  treasurer,  be 


INSURANCE   IN  CONNECTICUT.  75 

paid  to  the  owners,  and  that  the  securities  themselves  should  be  returned  at  the  end 
of  three  years  from  the  15th  da\'  of  December,  1872. 

Less  than  $12,000  in  marketable  bonds  were  lodged  with  the  company  under  the 
contract.  The  balance  was  made  up  mostly  of  mythical  mortgages.  Fair  Haven 
Water  Company  stock,  and  town  of  Brighton,  111.,  bonds.  The  use  of  the  stuff  drew 
from  the  treasury- $4, 500  annually,  to  which,  in  return,  even  the  fractional  $12,000 
contributed  not  a  cent  of  revenue.  It  is  obvious  that  a  fund  thus  constituted, 
whether  good  or  bad,  if  allowed  as  an  asset,  should  be  charged  also  as  a  liability. 

The  amount  of  the  regiilar  capital  stock  is  variously  stated.  In  the  report  for 
1873  it  is  put  at  $100,000,  with  the  legend  "actually  paid  up  in  cash."  It  matters 
little  whether  it  is  called  less  or  more,  for  not  a  dollar  had  been  paid  on  a  single 
share.  June  2,  1873,  by  vote  of  the  directors  a  dividend  of  twenty-three  per  cent, 
was  declared  to  be  endorsed  on  the  certificates,  an  assessment  of  like  amount  having 
been  ordered  at  the  .same  meeting.  It  appears  from  the  testimony  that  several  gen- 
tlemen credited  on  the  books  with  the  ownership  of  stock  were  entirelv  unaware  of 
tlie  bounties  which  had  been  showered  upon  them.  On  the  original  paper  five  hun- 
dred and  forty  shares  were  subscribed  for  sundry  parties  "by  B.  Noyes."  From 
these  blocks  he  seems  to  have  made  transfers  freely  without  consulting  either  osten- 
sible sellers  or  buyers. 

C.  S.  Maltby  testified  that  he  never  authorized  B.  Noyes  to  subscribe  for  fifty 
shares  for  him  or  to  transfer  or  receive  it.  J.  A.  Bishop,  of  the  Yale  National  Bank, 
testified  that  he  did  not  authorize  B.  Noyes  to  make  a  subscription  of  fifty  shares  for 
him,  that  he  had  received  no  certificate  for  it,  and  did  not  authorize  B.  Noves  to 
transfer  it  to  Samuel  S.  Noyes.  Joseph  A.  Smith  testified  that  he  never  authorized 
B.  Noyes  to  transfer  five  shares  to  him.  The  mayor  of  the  cit>-,  H.  G.  Lewis,  swore 
that  he  owned  none  of  the  stock  and  had  never  authorized  any  transfer  to  him. 

The  dividend  of  twenty-three  per  cent.,  amounting  to  $25,300,  was  made  on  a 
nominal  capital  of  $1 10,000,  leaving  §84,700  unpaid.  It  was  declared  out  of  the  sur- 
plus created  b}'  the  deposit  of  the  guaranty  capital  already  described.  As  nearly  as 
existing  conditions  permit,  Benjamin  Noyes  had  succeeded  in  creating  something 
out  of  nothing.  These  phantoms,  too,  he  treated  as  realities  with  such  apparent  sin- 
cerity that  men  of  considerable  intelligence  were  deluded  by  the  show.  The  other 
two  items  thrown  out  by  the  commissioner,  agency  balances  and  Virginia  Coal  Com- 
pany stock,  were  about  equally  worthless. 

Returning  to  assets  allowed  we  find  the  commissioner  too  liberal  by  over  $200,000. 
He  included  at  a  valuation  of  $108,000,  the  bonds  conveyed  by  the  National  Life  of 
New  York,  but  never  delivered  because  the  superintendent  at  Albany  kept  them 
securely  locked  in  his  vault  for  the  protection  of  the  policy-holders  of  that  state. 

He  estimated  the  building  of  the  company  at  $269,822. 50.  By  special  permission 
of  the  general  assembly  this  structure  was  erected  on  ground  leased  from  Trinity 
Parish,  New  Haven,  for  sixty  years  from  October  i,  1 871,  at  an  annual  rental  of 
g8,ooo  for  the  first  ten  years,  $9,000  for  the  next  ten,  and  for  the  rest  of  the  term  at 
six  per  cent,  on  the  appraised  value  of  the  ground,  the  yearly  rent  to  be  never  less 
than  $9,000.  .-Vt  the  hearing  the  witnesses  produced  by  the  commissioner  estimated 
the  value  of  the  leasehold  at  from  $100,000  to  $125,000.  The  experts  of  Mr.  Noyes 
thought  much  more  highly  of  the  investment  ranging  from  $250,000  upward.  Till 
the  time  of  the  hearing  it  had  not  yielded  sufficient  revenue  to  meet  the  ground-rent 
and  current  expenses. 

After  the  finding  of  the  court  many  officials  would  have  abandoned  fturtlier 
attempts  to  break  up  a  combination  so  securely  intrenched,  and  backed  by  such 


76  INSURANCE   IN   CONNECTICUT. 

varied  and  powerful  influences.  Whatever  disaster  might  come  in  the  future,  a  com- 
missioner unwilling  to  encounter  trouble  could  hold  up  the  record  to  show  that  he 
had  fully  complied  with  the  law,  and  that  further  responsibility  rested  elsewhere. 
Not  thus,  however,  with  Mr.  Stedman.  He  felt  that  his  duty  to  husbands  and  fathers 
who  for  man}'  years  had  paid  premiums  through  trust  in  false  promises,  to  widows 
and  orphans  threatened  with  robbery  in  the  hour  of  bereavement,  and  to  the  state 
which  had  made  him  guardian  of  these  special  interests,  demanded  that  he  should 
press  forward  without  faltering.  Accordingly,  on  the  5th  of  May,  1875,  he  submitted 
a  special  report  to  the  general  assembly.  After  marshaling  the  facts  he  demonstrated 
by  applying  to  the  case  the  well-known  principles  of  the  science,  that  the  company 
was  hopelessly  insolvent,  that  recovery  was  impossible,  and  that  the  longer  it  contin- 
ued in  business  the  more  disastrous  would  be  its  unavoidable  failure.  He  also  quoted 
from  his  voluminous  files  to  show  how  Noyes  was  working  to  frighten  policy-holders 
into  the  surrender  of  claims  at  fractions  of  their  face. 

On  the  24th  of  the  month  came  a  reply  addressed  to  the  general  assembly  and 
signed  by  thirteen  directors.  It  throws  little  fresh  light  on  the  controversy.  In 
answer  to  the  charge  that  not  a  dollar  had  ever  been  paid  on  the  capital  stock  it 
defends  the  course  of  the  company  on  the  grounds,  ist,  that  the  charter  authorizes  it 
to  go  into  operation  upon  subscribed  capital;  and,  2nd,  "that  the  payment  of  the 
stock  had  not  been  called  for  by  the  directors,  either  in  whole  or  in  part,  simply  for 
the  reason  that  no  necessity  had  arisen  for  calling  for  its  payment." 

Evidently  Mr.  Noyes  foresaw  with  far  more  penetrating  vision  than  the  legisla- 
ture the  use  that  could  be  made  of  the  instrument. 

July  14th  the  Senate  passed  a  resolution  unanimously  recommended  by  the  Com- 
mittee on  Insurance,  to  annul,  on  the  first  day  of  September,  1875,  the  charters  of  the 
American  Mutual  Life  Insurance  Company,  and  of  the  American  National  Life  and 
Trust  Company,  unless  the  latter,  on  or  before  that  day  should  supply  the  deficiency 
existing  in  its  assets,  and  receive  from  the  commissioner  a  certificate  to  that  eflfect. 

On  the  20th  of  July  the  matter  came  up  in  the  House,  when  two  provisos  ap- 
peared, the  first  offered  by  Lynde  Harrison,  of  Guilford,  in  the  interest  of  the  managers, 
and  the  second  by  Elisha  Johnson,  of  Hartford,  who  favored  the  naked  resolution  of 
the  Senate.  By  the  first  it  was  provided  that  in  case  of  disagreement  between  the 
commissioner  and  the  company  in  regard  to  the  sufficiency  of  the  assets,  upon  the 
application  of  either,  the  chief  justice  of  the  state  should  designate  one  of  the  judges 
of  the  Superior  Court  to  sit  with  him  to  try  the  issue,  that  their  determination 
respecting  the  amount,  value  and  sufficienc>'  of  the  assets,  should  be  conclusive,  and 
that  they  should  thereupon  issue  their  certificate  of  the  amount  of  the  deficiency,  if 
any,  to  be  paid  in,  and  if  the  company  within  thirty  days  made  up  the  deficiency  so 
found,  the  main  resolution  should  become  inoperative  and  void.  The  decision  was 
required  to  be  made  and  the  certificate  delivered  before  November  i,  1875. 

By  the  second  it  was  provided  that  in  case  of  disagreement  between  the  commis- 
sioner and  the  company  as  to  the  sufiiciency  of  its  assets,  and  the  deficiency  was  not 
supplied  on  or  before  vSeptember  i,  1S75,  the  commissioner  should  on  that  day  take 
possession  of  all  the  assets,  books  and  papers  of  the  company,  and  hold  them  subject 
to  the  order  of  the  chief  justice,  and  to  be  disposed  of  as  provided  by  law. 

On  the  2 1st  the  Senate  voted  to  concur,  and  the  bill,  as  amended,  became  law. 
Before  the  final  vote  in  the  house  several  sudden  and  radical  conversions  took  place. 
The  reasons  for  the  changes  were  freely  suggested  in  the  debate.  In  his  next  annual 
report  the  commissioner,  with  a  courage  as  breezy  and  refreshing  as  it  is  unusual, 
in  drawing  back  a  corner  of  the  curtain,  disclosed  not  hints  and  suspicions,  but  names 
and  prices. 


INSURANCE    IN   CONNICCTICUT.  77 

"  And  it  should  also  be  stated  that  two  of  the  ineiiibers  of  the  House,  Bus  Well  Carter,  of 
Plainville  (holding  a  policy  for  Si.ooo  in  the  company),  and  George  T.  Steel,  of  Bristol  (holding 
one  for  $2,000),  speaking  earnesth-  and  with  great  apparent  sincerity,  as  policy-holders,  plead  for 
leniency  to  the  company,  and  induced  the  members  to  consent  to  the  first  House  proviso.  Up  to 
within  two  hours  of  this  action  of  theirs  they  had  been  vehement  against  the  companj-,  and 
against  any  change  in  the  action  of  the  Insurance  Committee.  Two  days  afterwards  the}' 
surrendered  their  policies  to  the  company  and  received  their  mone\'  value." 

Sttibs  in  the  check-book  of  Noyes  show  that  otit  of  the  funds  of  the  company 
during  the  year  1875  and  the  early  part  of  1876,  he  paid  over  twenty-seven  thousand 
dollars  to  lawyers,  lobbyists  and  scribblers.  Much  of  this  was  used  around  the  cap- 
itol.  Some  of  the  money  passed  through  hands  notoriously  corrupt.  Some  was  ac- 
cepted by  men  of  high  repute,  who,  for  a  price,  consented  to  act  as  secret  agents  in 
aiding  the  continuance  of  one  of  the  most  detestable  forms  of  fraud.  Perhaps  in 
open  court  it  is  proper  to  defend  and  to  defend  vigorously  even  the  worst  offenders. 
But  when  one,  no  matter  how  thickly  veneered  with  respectability,  takes  a  fee  for 
prowling  with  hidden  and  tinavowed  designs  aroimd  the  halls  of  legislation  in  the 
interests  of  crime,  it  is  fairly  questionable  whether  the  hireling  is  not  more  guilty 
than  his  employer. 

As  the  company  had  not  made  good  the  deficiency,  the  commissioner,  in  compli- 
ance with  law,  prepared  to  take  possession  on  the  ist  of  September.  He  was  re- 
strained by  an  injunction,  is.sued  Augu.st  31,  by  Jtidge  Beardsley,  of  the  Superior 
Court.  This  was  dissolved  on  the  8th  of  September,  but  while  it  was  in  force  the 
United  States  District  Judge  in  New  York  city,  ttpon  the  petition  of  local  policy- 
holders, issued  a  restraining  order,  which  was  also  dissolved  after  a  hearing. 

In  ptirsuance  of  the  special  law  passed  to  meet  the  case,  a  hearing  before  Chief 
Justice  Park,  assisted  by  Judge  L,.  F.  S.  Foster,  began  the  5th  day  of  October,  and  on 
the  30th  they  certified  that  the  deficiency  in  its  assets  amoitnted  to  $50,000.  The 
total  assets  were  estimated  by  the  company  at  $1,207,598.63,  by  the  insurance  depart- 
ment at  $577,578. 12  and  by  the  judges  at  $1,013,279.65;  and  the  liabilities  respec- 
tively at  $1,073,294. 16,  $1,273,932.98  and  $1,073,294. 16.  The  judges  reftised  to  give 
an  official  detailed  statement  of  their  valuations,  but  Jtidge  Park  furnished  verbal  in- 
formation to  the  commissioner  from  which  he  prepared  a  table.  They  considered 
the  btiilding  worth  $300,000  and  the  lease  $50,000.  Brighton  bonds  (par  $26,200), 
Virginia  Coal  stock  and  city  lots  were  lumped  together  at  $50,009.54.  The  bonds 
still  held  by  the  New  York  superintendent  were  placed  at  $121,750. 

November  22d  the  directors  voted  to  increase  the  capital  stock  $50,000  and  to 
require  full  payment.  On  the  27th  the  ofl&cers  certified  that  the  full  amount  had 
been  subscribed  and  paid,  and  on  the  29th  the  commissioner  found  the  sum  standing 
to  the  credit  of  the  treasurer  at  the  Yale  National  Bank. 

The  commissioner  was  compelled  by  the  statute  to  assume  that  the  findings  of 
the  judges  were  correct.  Accordingly,  though  still  profoundly  lacking  in  faith,  he 
issued  a  qualified  circular,  to  the  effect  that  on  the  above  assumption  the  company 
was  solvent. 

By  what  legerdemain  the  credit  of  $50,000  found  its  way  upon  the  books  of  the 
bank,  whence  it  came,  and  whither  it  went,  were  questions  quickly  lost  sight  of  in 
the  swift  whirl  of  events.     Mr.  Noyes  was  plotting  a  flank  movement. 

Connecticut  pleased  him  no  longer.  That  niuch-endttring  person  was  about  to 
turn  his  back  upon  the  state.  He  still  carried  the  lobby  in  his  pocket ;  he  cotild 
still  control  in  large  measure  legislation  likely  to  affect  his  interests ;  he  could  still 
hoodwink  judges ;  he  could  still  command  a  following  of  uncritical,  but  highly 
respected,  gentlemen.     In  the  presence  of  so  many  blessings  one  form  loomed  up 


78  INSURANCE   IN    CONNECTICUT. 

before  him,  ubiquitous,  irrepressible,  a  Nemesis,  threatening  vengeance  for  the  past, 
and  warning  him  away  from  the  fair  and  familiar  fields  that  continued  to  tempt  his 
enterprise.  He  saw  that  even  the  points  won  in  the  fight  with  the  commissioners, 
were  of  negative  value,  and  could  yield  no  practical  benefits.  To  find  an  atmos- 
phere suited  to  the  flights  of  his  genius,  he  must  get  beyond  the  jurisdiction  of  that 
mild-mannered,  but  troublesome,  officer.  Even  before  the  hearing,  held  by  Judges 
Park  and  Foster,  began,  Noyes  was  not  only  actively  prospecting  elsewhere,  but  had 
already  decided  in  outline  upon  a  plan  of  future  operations. 

In  1873  the  National  Capital  Life  Insurance  Company  of  Washington,  D.  C. , 
having  lost  two-thirds  of  its  capital,  voted  to  reinsure,  wind  up,  and  divide  the  sal- 
vage among  the  shareholders.  In  two  3'ears  the  work  was  practically  accomplished, 
all  the  odds  and  ends  supposed  to  have  any  value  having  been  converted  into  cash 
and  distributed.  In  August,  1875,  Mr.  Noyes  appeared  on  the  scene,  and  offered  to 
buy  the  charter.  A  committee  from  the  board  of  directors  agreed  to  fix  the  price  at 
;g4,ooo.  If  paid,  the  sum  would  be  a  clear  gain,  as  they  considered  the  franchise 
worthless.  The  off'er  was  promptly  accepted.  Mr.  Noyes  then  left,  but  promised  to 
return  soon  to  complete  the  transaction.  The  following  December  he  reappeared  in 
Washington,  attended  by  two  confidential  lieutenants,  Henry  D.  Walker  and  A. 
Goodrich  Fay.  A  check  for  $4,000  was  now  given  to  the  committee,  and  the  charter 
was  turned  over  to  the  buyers. 

The  scene  shifts  to  New  York  city,  where  the  inner  circle  held  several  dark 
seances  to  materialize  out  of  the  realm  of  shades  the  capital  needed  to  clothe,  with 
an  appearance  of  life,  the  corpse  thus  lifted  from  the  grave.  It  was  natural  that  the 
magicians  should  seek  the  aid  of  Augustus  T.  Post,  for  in  1871  he  had  sold  to  the 
American  Mutual  L,ife  the  Brighton  bonds.  Mr.  Post  agreed  to  loan  them  for 
fifteen  days  a  mixed  lot  of  western  town  and  county  bonds,  having  a  face-value  of 
$50,400,  and  they  agreed  to  pay  $1,500  for  the  accommodation.  By  the  terms  of  the 
contract,  the  securities  were  deposited  in  the  Continental  National  Bank,  as  the  agent 
of  the  lender,  and  they  were  never  to  pass  out  of  his  complete  control.  During  the 
period  Walker  was  to  have  the  privilege  of  inspecting  and  showing  them  to  others. 

Another  lot  of  bonds  and  stock  amounting  on  their  face  to  $132,000  were 
borrowed  and  deposited  on  similar  conditions  in  the  Central  Safe  Deposit  Companj'. 
Simultaneously,  in  W^ashington,  books  were  opened  for  subscriptions  to  renew  the 
capital  of  $150,000  of  the  National  Capital  Life  Insurance  Company.  A.  G.  Fay, 
for  himself  and  others,  took  the  whole  amount.  The  affair  was  organized  by  the 
election  of  William  H.  Clagett,  of  that  city,  temporary  president ;  A.  Goodrich  Fay, 
secretary ;  and  Henry  D.  Walker,  treasurer.  Mr.  Clagett  was  not  admitted  to  the 
secrets  of  the  ring.  The  stock  subscriptions  were  paid  to  him  as  president  in  checks 
or  certificates  which  he  supposed  to  be  good  and  which  under  that  impression  he 
turned  over  to  the  treasurer. 

On  the  17th  the  directors  resolved, 

"That  Henry  D.  Walker,  treasurer  of  this  companj',  be,  and  he  is  hereby,  authorized  to 
certify  as  treasurer,  that  one  hundred  and  fiftj'  thousand  dollars  of  capital  stock  of  this  company 
is  paid  in  under  the  provisions  of  the  7th  section  of  its  charter. 

"  Attest  "A.  G.  F.%v,  Sccfctary." 

In  pursuance  of  that  vote  the  following  certificate  was  issued  : 

"  This  is  to  certifj'  that  the  capital  stock  of  the  National  Capital  Life  Insurance  Company  of 
Washington,  D.  C,  was  duly  paid  in  on  the  17th  day  of  December,  1S75,  to  the  amount  of  one 
hundred  and  fifty  thousand  dollars,  and  that  at  the  present  time  the  same  is  invested  in  securities 


INSURANCE    IN    CONNECTICUT.  Id 

(stock  and  bonds),  the  par  value  of  which  amounts  to  one  hundred  and  eighty-four  thousand,  six 
hundred  and  five  dollars,  and  that  the  same  are  now  in  nu-  po.ssession  as  treasurer. 

"  December  20,  1875.  "  Henry  D.  Walker, 

"  Treasurer  of  National  Capital  Life  Insurance  Company." 

The  managers  of  the  Wa.shington  company  now  invited  a  committee  from  the 
board  of  directors  of  the  New  Haven  Compan}'  to  inspect  the  securities  fraudulently 
deposited  in  New  York  city.  The  invitation  was  accepted  and  Joseph  A.  Smith 
selected.  December  23d  Smith  was  taken  by  Walker  to  the  Continental  Bank  and 
Central  Safe  Deposit  Company.  The  borrowed  securities  were  exhibited  to  him, 
and  he  made  inventories  of  both  lots. 

The  same  day  he  certified  to  the  home  office  : 

"  I  have  ....  personally  examined  the  schedule  of  assets  of  the  National  Capital  Life 
Insurance  Companj' of  Washington,  D.  C,  and  find  that  said  National  Capital  Life  Insurance 
Company  of  Washington,  D.  C,  have  on  special  deposit  in  said  Central  Safe  Deposit  Company 
and  said  Continental  National  Bank  respectively  the  following  securities,  to  wit.  (Here  follow 
the  inventories.) 

"The  gross  amount  of  said  securities  being  one  hundred  and  eight\--two  thousand,  four 
hundred  dollars  (5182,400)  with  accrued  interest  thereon,  amounting  to  twenty-five  hundred 
dollars  or  thereabouts,  the  market  value  of  which  I  am  informed  and  believe  to  be  one  hundred 
and  fifty  thousand  dollars,  which  said  amount  of  one  hundred  and  fifty  thousand  dollars  consti- 
tutes the  capital  of  said  National  Capital  Life  Insurance  Company  of  Washington,  D.  C,  in 
accordance  with  the  terms  and  conditions  of  the  charter  of  the  said  company. 

"Joseph  A.  Smith." 

With  the  eqttation  reduced  to  simplest  terms,  B.  Noyes,  as  the  embodiment  of  the 
Washington  Company,  then  formally  contracted  with  B.  Noyes  as  the  embodiment 
of  the  New  Haven  Company,  to  take  the  assets  of  the  latter  and  assume  its  liabilities. 
At  the  end  of  the  fifteen  days  the  bogus  capital  of  $150,000  was  rettirned  to  the 
lenders.  In  the  mind  of  the  inventor  the  growth  that  sprang  tip,  blossomed  and 
perished  within  two  weeks,  was  no  more  and  no  less  genuine  than  the  "  preferred 
stock,"  "  guaranty  capital,"  and  other  stttfF  christened  with  imposing  titles,  which 
''learned  judges,"  on  more  occasions  than  one,  after  "full  consideration,"  had 
impliedly  pronotmced  good.  The  wreckage  gathered  from  New  Haven  afforded  the 
enterprise  as  launched  afresh  under  a  change  of  colors,  the  means  for  coming  before 
strangers  in  presentable  garb. 

At  the  annual  meeting  of  the  company,  held  in  Washington  early  in  May,  1S76, 
Benjamin  Noyes  was  elected  president ;  William  H.  Clagett,  vice-president ;  Henry 
D.  W^alker,  treasurer  ;  and  J.  A.  Mortimore,  secretar}-.  Mr.  Walker  retained  charge 
of  the  department  of  New  York  and  New  Jersey,  with  headquarters  at  170  Broad- 
way. A  department  for  New  England  was  created,  with  headquarters  at  room  No.  2, 
Insurance  Building,  New  Haven.  The  compan}-  advertised  that  it  had  o\'er  one 
million  of  dollars  in  assets. 

In  Januar)-,  1S77,  the  National  Capital  Life  contracted  to  reinsure  the  New  Jersey 
Mutual  Life  Insurance  Company,  of  Newark,  which  had  over  thirteen  thousand 
policy-holders,  and  claimed  over  $1,800,000  in  property.  The  authorities  of  New 
Jersey  regarded  the  trade  as  a  plot  to  steal  the  assets.  Justice  did  not  delay.  In 
March  Noyes  was  arrested.  In  May  the  case  was  called,  and  as  he  did  not  appear  his 
bail  of  $5, 000  was  declared  forfeited.  Later  he  was  tried,  convicted  and  sentenced 
to  a  term  of  eighteen  months  in  prison.     All  efforts  to  procure  a  pardon  failed. 

In  October  Judge  Martin  of  the  Superior  Court,  on  motion  of  Commissioner 
Stedman,  issued  a  temporary  injunction  restraining  the  National  Life  and  Trust  and 
the  American  Mutual  Life  Insurance  Companies,  their  officers  and  agents,  under  a 


80  INSURANCE   IN    CONNECTICUT. 

se\-eral  penalty  of  $50,000,  from  proceeding  fnrther  in  business,  except  to  receive  any 
preniiums  tendered,  and  hold  the  same  as  a  special  deposit  to  abide  the  order  of  the 
conrt,  to  pay  gronnd-rents  and  to  receive  proofs  of  losses  nnder  policies. 

Commissioner  Stedman  also  applied  to  have  a  receiver  appointed  for  both  com- 
panies. Gen.  William  B.  Wooster,  of  Derby,  was  appointed  by  the  Snperior  Conrt  a 
committee  to  hear  the  testimony  in  the  case.  On  all  points  he  reported  in  favor  of 
the  commissioner.  Accordingly,  Jtidge  Pardee  granted  the  application.  Talcott  H. 
Rnssell,  Esq.,  of  New  Haven,  was  appointed  temporary  receiver  Jnly  i,  1878,  and  per- 
manent receiver  November  9th.  In  addition  to  the  ordinary  fiinctions  conferred  by 
law,  he  was  specially  authorized  to  bring  suits  to  collect  unpaid  subscriptions  to  the 
capital  stock  and  for  installments  on  the  same,  called  and  improperly  canceled.  One 
year  from  the  8th  day  of  November,  1878,  was  limited  for  the  presentation  of  claims 
against  the  company,  etc. 

The  managers  had  taken  good  care  that  the  receiver  should  find  very  little.  By 
an  act  approved  July  8,  1874,  the  treasurer  of  Connecticut  was  authorized  to  receive 
"a  bond  and  first  mortgage  "  for  the  sum  of  $100,000,  on  the  insurance  building  in 
New  Haven,  and  to  surrender  to  the  company  all  other  mortgages  and  securities  held 
for  the  protection  of  policy-holders.  The  mortgages  thus  surrendered  were  duly  col- 
lected, and  the  proceeds  moved  out  of  the  state.  Books,  papers,  everything  supposed 
to  have  any  value,  or  to  throw  any  light  on  the  past  were  spirited  away.  The  build- 
ing could  not  be  stolen  bodily,  and  so  remained,  a  monument  of  folly  and  crime.  If 
the  rent  was  not  paid  promptly  by  the  terms  of  the  lease,  the  property  was  forfeited 
to  the  leasor.  Extracts  from  3  letter  of  Noyes  to  Walker,  dated  June  11,  1876,  will 
show  how  closely  they  sometimes  came  to  the  edge: 

"  My  Dear  Walker  : 

"  We  must  pay  to  Bishop  who  is  treasurer  of  Trinity  Church,  the  ground  rent  due  ist  May, 
$3,000.     I  have  paid  losses,  etc.,  so  that  I  am  short,  and  we  must  pay  $1,250  to  Fay,  sure. 

"  I  have  given  Smith  a  line  to  Mortimer  to  pay  over  to  j'ou  all  he  can,  way  down  to  his  bot- 
tom dollar,  so  that  you  can  send  your  check  as  treasurer,  paj-able  to  J.  A.  Bishop — leaving  oiF 
Treasurer — for  S2000,  so  that  the  ground  rent  will  come  direct  from  j-ou  as  treasurer,  and  Bishop 
will  iise  the  money  to  pay  Trinity  church  debt  with,  but  not  credit  it  at  present,  for  if  the  legis- 
lature at  the  heel  of  the  session  under  Stedman's  spur,  should  pass  some  damnable  act  of  confis- 
cation, the  records  will  show  that  the  building  and  lease  is  forfeited  to  Trinity  church,  when,  in 
fact.  Bishop,  their  treasurer,  had  the  rent  money  in  liand  and  it  is  not  forfeited — and  we  fix  it  up 
anew— which,  if  so  done,  would  wipe  out  the  state  deposit.'' 

]\Ir.  Russell  fought  step  by  step  to  recover  what  belonged  to  the  creditors.  The 
btiilding  realized  $35,600,  but  back  taxes  and  assessments  reduced  the  net  to  about 
$20,000.  About  $2,000  was  obtained  for  the  Brighton  bonds.  Stockholders  and 
directors  were  forced  by  lawsuits  to  contribute  over  $40,000.  Some  suits  failed 
through  the  death  or  insolvency  of  the  parties.  Efforts  to  hold  Post  and  others 
pecuniarily  responsible  for  the  fraud  practiced  through  their  aid,  also  failed  through 
the  death  and  reputed  insolvency  of  the  principal  parties.  In  February,  1893,  the 
receiver  closed  the  trust,  having  paid  two  dividends  of  5  per  cent,  each,  aggregating 
$66,875.76. 

On  the  release  of  Mr.  Noyes  from  prison  late  in  September,  1879,  many  citizens 
of  New  Haven  gave  him  a  reception  at  the  Elliott  House.  From  the  tenor  of  the 
remarks  on  that  occasion,  a  visitor  unfamiliar  with  the  history  of  the  guest,  would 
have  supposed  that  a  hero,  persecuted  by  malice  to  the  verge  of  martyrdom,  had  re- 
turned at  last  triumphant,  to  find  among  friends  of  happier  days,  if  not  fresh  chances 
for  the  e.xercise  of  rare  gifts,  at  least  a  retreat  for  an  honored  old  age.     But  the  blaze 


INSURANCE   IN   CONNECTICUT.  81 

of  welcome  quickly  died  away.  The  last  dozen  years  of  fruitless  stniggle  were 
briohteued  bv  few  gleams  of  light.  Deserted  by  nearly  every  one,  Mr.  Noyes  died 
in  the  hospital  at  New  Haven,  August  31,  1891,  dependent  for  comforts  in  his  last 
illness  on  the  kindness  of  a  few  old  friends. 


CHAPTER    IX. 

INSURANCE   IN   CONNECTICUT— Coniinued. 

THE  CONNECTICUT  HEALTH  (HARTFORD  LIFE)  INSURANCE  COMPANY. 

URING  its  brief  existence  this  company  twice  changed  its  name  and  twice 
the  essential  character  of  its  risks.  By  the  act  of  incorporation,  passed  in 
1S48,  its  business  was  confined  to  health  insurance.  As  at  a  later  date 
could  have  been  foreseen  the  scheme  proved  a  failure.  Facts  had  not  been 
sufficiently  collected  and  classified  to  afford  a  basis  for  rates.  Again,  the 
border  lines  of  ailment  that  must  be  crossed  to  entitle  policy-holders  to  benefits,  like 
isothermal  lines  across  the  continent,  shadowy  at  best,  grew  more  tortuous  from 
prospects  of  indemnity. 

The  next  year  the  company  was  empowered  to  make  insurance  predicated  upon 
lives,  to  increase  the  capital  from  the  limit  of  $50,000  to  ^100,000,  and  to  change  the 
n|ime  from  the  Connecticut  Health  to  the  Hartford  Life  and  Health  Insurance  Com- 
pany, which  in  1852  was  razeed  to  the  Hartford  Life  Insurance  Company,  the  health 
department,  except  for  early  issues,  having  been  entirely  abandoned. 

It  had  been  formed  as  a  sort  of  offshoot  from  the  Connecticut  ^Mutual  to  occupy 
a  field  from  which  this  was  excluded,  but  now  came  into  direct  competition  with  its 
foster-father.  For  a  time  the  company  prospered  under  the  new  departure,  but  in  an 
evil  hour  tried  the  experiment  of  insuring  negro  slaves  and  coolies  by  ship-loads. 
Although  premiums  were  very  high  they  were  still  far  from  remunerative.  Asa  rule 
the  worst  masters  took  out  policies  and  in  the  most  hazardous  occupations.  Negroes 
were  described  as  Cssar  or  Cato,  Jim  or  Tom,  and  identification  was  so  difficult  that 
if  any  of  a  gang  died,  names  in  the  proofs  of  loss  were  easily  fitted  to  them.  Shippers 
of  coolies  knew  the  average  percentage  of  loss,  and  hence  had  ever)-  advantage  in 
arranging  terms.  After  two  or  three  years  the  experiment  was  abandoned,  but  not 
till  incurable  wounds  had  been  left  behind.  The  company  withdrew  from  New 
York  and  Massachusetts  in  1857,  and  wound  up  its  affairs  with  convenient  dispatch. 
It  built  and  occupied  the  block  on  Pearl  street,  now  owned  and  occupied  by  the  State 
Savings  Bank. 

The  company  was  well  officered,  and  hence  its  mistakes  are  the  more  surprising. 
Its  president,  James  Dixon,  a  winsome,  tactful,  scholarly  gentleman,  member  of  Con- 
gress 1845-49,  United  States  senator  two  terms,  1857-69,  succeeded  better  in  politics 
than  with  insurance.  Conservative  by  temperament  he  had  little  sympathy  with 
measures  of  reconstruction  contrived  to  secure  party  supremac}-,  and  hence  sided  with 
President  Johnson,  whose  eccentricities  brought  swift  disaster  to  his  cause  and  its 
supporters.  William  T.  Hooker,  afterward  president  of  the  Guardian  Mutual  Life 
Insurance  Company  of  New  York,  was  vice-president,  and  Henry  L.  Miller,  secretary. 
6 


82  INSURANCE   IN   CONNECTICUT. 

THE  CHARTER  OAK  LIFE  INSURANCE  COMPANY  (HARTFORD). 

This  institution  at  one  time  held  the  promise  of  a  brilliant  career,  but  reckless 
investments  brought  its  alTairs  to  a  crisis  from  which  the  fall  was  not  less  swift  than 
sad.  "  By  the  charter  the  capital  was  limited  to  $200,000,  ten  per  cent,  to  be  paid  in 
cash  and  ninety  in  stock  notes.  The  issue  of  policies  on  the  lives  of  husbands  for 
the  exclusive  benefit  of  wives  and  children  was  authorized.  Three-fourths  of  the 
funds  must  be  invested  either  in  mortgages  on  real  estate  of  double  the  value  of  the 
debt  secured,  in  the  stocks  of  the  United  States  or  of  the  several  states,  or  in  the 
bonds  of  New  York,  Boston  and  the  cities  of  Connecticut.  One-fourth  might  be 
loaned  upon  indorsed  promissory  notes  not  having  more  than  twelve  months  to  run. 
The  directors  were  forbidden  to  make  dividends  to  stockholders  exceeding  eight  per 
cent,  per  annum  on  the  capital. 

Books  for  subscription  were  opened  by  the  commissioners  August  3,  1850. 
There  was  such  a  rush  for  the  shares  that  nine  thousand  six  hundred  and  nine 
($969,000)  were  taken  and  the  first  installment  paid.  The  total  was  reduced  by  allot- 
ment to  two  thousand  ($200,000).  On  the  24th  of  the  same  month  the  subscribers 
organized  by  adopting  by-laws  and  electing  the  following  directors  :  Gideon  Welles, 
William  T.  Lee,  Calvin  Day,  Tertius  Wadsworth,  Thomas  Belknap,  Erastus  Smith, 
James  G.  BoUes,  Charles  Seymour,  Jr.,  John  A.  Butler  and  L.  F.  Robinson.  The 
board  met  the  same  evening  and  elected  Gideon  Welles,  president ;  William  T.  Lee, 
vice-president,  and  Samuel  Coit,  secretary.  Archibald  Welch,  M.D.,  was  appointed 
consulting  physician.  He  was  killed  in  a  railway  accident  at  Norwalk  in  1S53. 
Dr.  Samuel  B.  Beresford  was  then  appointed.  To  his  care  and  skill  the  company 
was  largely  indebted  for  the  excellent  character  of  its  risks. 

Mr.  Welles,  an  able  writer  on  current  political  topics,  in  early  life  a  stalwatt 
advocate  of  Jacksonian  Democracy,  a  frequent  member  of  the  legislature,  comptroller 
of  the  state,  postmaster  at  Hartford,  and  Secretary  of  the  Navy  under  Presidents 
Lincoln  and  Johnson,  retired  from  the  presidency  in  March,  1852.  He  was  succeeded 
by  A.  Gill.  John  L.  Buuce  was  elected  vice-president,  and  James  C.  Walkley, 
secretary. 

To  increase  the  cash  assets  to  $100,000,  the  board  voted  in  June,  1852,  to  sell  to 
William  T.  Hooker  stock-notes  amounting  to  $74,340,  for  the  sum  of  $67,025,  the 
proceeds  to  lie  as  a  special  deposit  at  ii\'e  per  cent,  interest  in  the  Connecticut  River 
Bank  till  February  28,  1853.  In  February,  1853,  the  notes  were  repurchased  from 
Mr.  Hooker  at  the  original  price.  Early  in  March  the  process  was  repeated  on  a 
smaller  scale.  Notes  of  a  face  value  of  $53, 39°  were  sold  for  $50,000,  and  the 
proceeds  deposited  as  before. 

The  difference  in  the  sums  realized  from  the  two  sales  was  made  up  in  the  cash 
assets  of  the  company  from  the  profits  of  the  year.  In  July,  1854,  a  different  device 
was  adopted  to  meet  the  legal  requirements  of  certain  states  that  excluded  outside 
companies  unless  they  could  show  a  given  amount  of  paid-up  capital,  invested  in 
ajjproved  securities.  Instead  of  selling  the  stock-notes  and  making  a  special  deposit 
of  the  proceeds  for  a  definite  period,  at  the  expiration  of  which  they  were  to  be  repur- 
chased, and  so  on  in  a  round  of  concentric  circles,  the  secretary  was  authorized  at 
discretion  to  sell  them  and  with  the  proceeds  buy  bank,  state  or  city  stocks  to  stand 
in  the  name  of  the  company.  The  institution  further  agreed  to  buy  back  the  notes 
whenever  requested  by  the  purchaser  at  the  "  full  amount  thereof,"  and,  to  provide 
the  means,  the  secretary  with  the  consent  of  the  president  was  authorized  to  sell  any 
of  the  stocks  in  the  treasury. 


INSURANCE  IN  CONNFXTICUT.  83 

As  parties  bought  and  sold,  the  stock-notes  changed,  l)nt  care  was  taken  to  accept 
none  unless  good.  As  we  have  seen,  this  feature  played  a  very  imi:)ortant  part  in 
early  insurance  when  the  country  was  comparatively  poor.  In  some  other  states  the 
device  was  used  fraudulently  to  launch  companies  without  resources  beyond  a  few 
chairs  and  other  furniture.  In  Hartford,  from  first  to  last,  both  makers  and  endorsers 
expected  to  meet  the  obligations  in  full  if  need  arose.  When  the  Protection  failed 
two  or  three  tried  to  evade  payment  on  technical  pleas,  but  were  beaten  in  the  courts. 
The  war  against  stock-notes  that  began  about  the  middle  of  the  century  in  several 
states  was  not  provoked  by  any  abuse  of  the  system  in  Hartford. 

In  March,  1855,  James  C.  Walkley  was  elected  president,  and  Elias  Gill  secre- 
tary. Up  to  this  time  the  position  of  president  had  been  honorary  rather  than  active. 
He  now  became  the  real  head,  and  was  expected  to  devote  his  energies  to  the  work. 
At  the  end  of  the  fiscal  year  Mr.  Gill  resigned,  and  was  succeeded  by  Samuel  H. 
White.  Few  changes  occurred  in  the  ofllice  corps  during  the  next  decade.  Thomas 
W.  Russell,  elected  vice-president  in  '59,  was  succeeded  by  Noyes  S.  Palmer  in  Sep- 
tember, '64.  Z.  A.  Storrs  followed  Mr.  Palmer,  and  was  succeeded  by  Mr.  White  in 
'72.  Halsey  Stevens  became  secretary  in  January,  '/3-  While  secretary  and  vice- 
president,  Mr.  White  also  acted  as  treasurer. 

In  March,  1867,  the  board  voted  that  the  president  and  secretary  notify  the 
stockholders  to  pay  up  in  cash  twenty-five  dollars  per  share,  within  thirty  days  after 
demand,  and  the  secretary  was  directed  to  indorse  the  same  upon  the  stock-notes. 
Two  reasons  are  given  ;  first,  the  legal  requirement  in  several  states  of  a  paid-up 
capital  in  the  sum  of  $150,000  ;  and  second,  the  ability  to  loan  on  the  best  bond  and 
mortgage  security  at  eight  per  cent,  a  year,  "so  that  the  maximum  dividend  of  eight 
per  cent,  semi-annually,  as  specified  by  our  charter,  can  be  declared  and  paid  regularly 
when  $150,000  are  paid  upon  the  capital  stock." 

A  year  later,  in  March,  1868,  another  vote  was  passed  in  substantially  the  same 
language  calling  in  the  final  twenty-five  dollars  per  share,  so  as  to  raise  the  paid 
capital  from  $150,000  to  $200,000,  and  directing  the  secretary  to  surrender  to  the 
makers  the  stock-notes  in  the  treasury. 

That  in  both  instances  the  money  for  paying  the  instalments  was  furnished  by 
the  company,  the  record  omits  to  mention,  possibly  on  account  of  the  provision  in 
the  charter  which  made  it  unlawful  for  the  directors  to  make  dividends  exceeding 
eight  per  cent,  per  annum  upon  the  capital.  By  a  curious  lapse  each  vote  refers  to 
the  charter  as  permitting  a  maximum  dividend  of  eight  per  cent,  semi-annually. 

Whether  the  reasons  given  for  the  transactions  were  addressed  to  possible  visi- 
tors from  the  insurance  departments  of  other  states,  or  were  thrown  in  to  beguile  the 
historical  inquirer  of  the  future,  must  be  left  to  conjecture. 

At  the  close  of  1863  the  company  had  in  force  3,047  policies  insuring  $5,909,011, 
with  gross  assets  amounting  to  $657,387,  exclusive  of  $100,000  in  stock-notes.  For 
the  next  nine  years  growth  was  rapid  and  apparently  solid.  Among  the  agents  of 
the  Charter  Oak  was  a  large  infusion  of  men  of  high  character  and  wide  influence, 
who  secured  for  it  a  very  desirable  clientage.  In  1S69  over  seven  thousand  two  hun- 
dred new  policies  were  issued,  insuring  over  ;$  18,000,000.  Though  this  was  the  most 
fruitful  year  in  its  history  the  three  that  preceded  and  the  three  that  followed  indicate 
great  activity  on  the  part  of  its  agents  and  great  confidence  on  the  part  of  the  public. 

In  the  face  of  superb  labor  in  the  field  the  home  management  was  weak  and 
wasteful.  As  from  the  walls  of  a  reservoir  too  flimsy  to  resist  the  pressure  from 
within,  all  at  once  both  patrons  and  the  public  saw  the  contents  of  the  treasury  pour- 
ing to  waste  through  several  bad  breaks. 


84  INSURANCE   IN  CONNECTICUT. 

The  first  official  warning  of  danger  came  from  John  W.  Stedman,  insurance  com- 
missioner of  Connecticut,  in  his  first  annual  report,  dated  June  9,  1875.  After  describ- 
ing the  charter  provisions  of  the  company  he  says: 

"  Only  ten  dollars  a  share  was  ever  paid  up  on  the  capital  stock.  The  remaining:  ninety 
dollars  were  paid  in  dividends.  On  this  full  paid  stock  a  dividend  of  eight  per  cent,  is  regularly 
paid  according  to  law,  and  in  addition  to  this  the  commissions  on  the  business  in  the  home  office 
are  divided  among  the  stockholders,  amounting  in  some  years  to  as  high  as  fourteen  dollars  a 
share.  Certainly  nothing  of  this  kind  could  have  been  contemplated  b}'  the  legislature  in  grant- 
ing the  charter  of  the  company,  and  I  think  it  wholly  unwarranted."  .  ..."  I  have  thus 
made  a  full  and  fair  presentation  of  the  embarrassments  of  this  comjiany.  There  has  been  a 
weakness  of  judgment  in  its  confidences,  and  a  carelessness  in  loaning  its  money  and  scattering 
it  in  gratuities,  amounting  to  a  moral  delinquency." 

The  embarrassments  were  more  serious  than  could  then  be  known.  Early  in 
1875  the  banking  house  of  Allen,  Stephens  &  Co.  failed,  owing  the  Charter  Oak 
$944,816.  A  part  of  the  indebtedness  grew  out  of  a  joint  interest  in  a  silver  mine  in 
Utah,  and  other  ill-defined  speculations.  The  claim  has  since  yielded  very  little 
except  trouble  and  expense. 

Early  in  the  seventies  the  Valley  Railway  was  built  from  Hartford  to  Say  brook 
on  the  west  bank  of  the  Connecticut.  Mr.  Walkle)-,  who  lived  down  the  river,  was 
father  and  president  of  the  company.  Hartford  subscribed  half  a  riiillion  toward  the 
stock,  which  was  increased  by  subscriptions,  mostly  from  other  towns,  to  a  little  over 
a  million.  First  mortgage  bonds  were  isstted  to  the  extent  of  another  million.  In 
1873  the  cost  per  mile  for  construction  was  given  as  $58,858,  and  for  equipment, 
$5,834.  The  excess,  furnished  almost  exclusively  by  the  Charter  Oak,  was  carried  as 
floating  debt  to  the  extent  of  $1,177,564.  For  convenience  this,  including,  perhaps, 
other  items,  was  funded  in  second  mortgage  bonds  to  theamount  of  ,g  1,250, 000,  which 
were  lodged  with  the  insurance  company  as  security  for  loans  aggregating  $1,083,456. 
As  the  railway,  coming  eight  months  out  of  twelve  in  competition  with  a  navigable 
river,  was  earning  little,  if  anything,  above  current  expenses,  the  outlook  for  the 
jtinior  bonds  was  extremely  dismal. 

To  build  up  btisiness  for  the  road  $235,874  were  loaned  to  a  manufacturing  con- 
cern in  Higanum,  and  ^75,000  upon  a  summer  hotel  in  Saybrook,  with  $25,000  addi- 
tional on  the  furniture.  Mining  property  in  West  Virginia  absorbed  another  half 
million  of  cash,  and  the  returns  from  this  also  have  come  chiefly  in  the  form  of  bills 
and  worry. 

While  the  sky  was  still  cloudless  the  company  erected,  at  a  reported  cost  of 
$844,380,  its  home  office  at  the  corner  of  Main  and  Athenjeum  streets,  moving  in  early 
in  '71.  Hot  disputes  afterwards  arose  at  intervals  over  the  value  of  the  property. 
Sixteen  years  later  it  was  sold  to  the  .^tna  Life  for  $231,000. 

I\Iinor  embarrassments  are  passed  by  not  because  they  were  trivial  in  them- 
selves, but  trivial  in  comparison. 

Great  alarm  followed  the  official  disclosure  of  this  condition,  and  a  lively  hunt 
for  some  mode  of  relief.  At  this  juncttrre  an  officer  of  the  New  York  Chamber  of 
Insurance,  and  an  expert  in  the  business,  brought  the  agents  of  the  company  into 
relations  with  Henry  J.  Furber,  vice-president  of  the  Universal  Life  of  New  York, 
who  had  already  taken  a  hand  in  winding  up  the  affairs  of  several  that  in  the  wild 
extravagance  of  the  time  had  been  driven  into  close  corners.  Mr.  Furber  had  recently 
won  the  good-will  of  the  insurance  department  of  New  York,  by  saving  for  the  North 
American  Life  a  large  line  of  bonds  and  mortgages,  liable  to  forfeiture  from  taint  of 
usury.     After  several  interviews  with  the  commissioner  and  other  prominent  citi- 


INSURAXXE   IN   COXXECTICUT.  85 

zens  of  Connecticut,  and,  with  their  approval,  Mr.  Furhcr  purchased  the  stock  of  the 
Charter  Oak  in  the  name  of  himself  and  his  friends. 

From  the  progress  then  made  in  his  investigations  the  commissioner  thought 
that  a  contribution  of  half  a  million  of  dollars  in  fresh  funds  would  make  good  the 
impairment  and  restort  technical  solvency.  Mr.  Furber  agreed  to  give  that  amount 
outright.  He  was  to  be  indemnified  by  monthly  payments  of  seven  and  one-half  per 
cent,  on  all  premiums  collected,  and  by  one-half  the  salvage  on  all  policies  purchased 
during  the  next  five  years.  It  was  further  agreed  that  at  the  option  of  the  company 
the  contract  might  be  liquidated  at  any  time  before  the  expiration  of  the  term,  after 
Furber  had  received  $500,000  with  interest  from  the  proceeds  of  the  contract,  and  in 
addition  such  further  sum  for  services  and  risks,  as  the  parties  might  agree  upon. 
In  case  of  disagreement  upon  the  terms  of  liquidation  the  matter  was  to  be  referred 
to  three  disinterested  arbitrators,  one  selected  by  each  part}-,  and  the  third  by  the 
persons  so  chosen.     Their  decision  was  to  be  final. 

The  commissioner  took  the  view  that  the  $500,000  should  not  be  charged  as  a 
liability,  as  it  was  to  be  repaid  gradually  from  the  loading  of  premiums.  On  the 
other  hand,  the  special  commission  afterwards  appointed  contended  that  it  became  an 
immediate  liability,  and  hence  did  not  technically  help  at  all  to  repair  the  gap  in  the 
assets. 

A  point  less  open  to  dispute  was  the  extreme  improbability  that  a  man  in  reality 
making  a  contract  with  himself  would  have  serious  trouble  in  fixing  the  compensa- 
tion for  "ser\'ices"  and  "risks,"  or  that  he  would  harm  his  bank  account  by  "liqui- 
dating" it  prematurel}-. 

The  affairs  of  the  company  passed  into  the  hands  of  the  new  management  late 
in  1875,  Edwin  R.  Wiggin  having  been  elected,  December  9th,  acting  president  for 
the  rest  of  the  year. 

At  the  next  annual  meeting,  January-  25,  1876,  James  C  Walkley,  S.  H.  White, 
Nelson  Hollister  and  Daniel  Philips  were  re-elected  directors,  while  Edwin  R.  Wiggin 
and  A.  H.  Dillon,  Jr.,  were  added.  The  same  day  Edwin  R.  Wiggin  was  elected  presi- 
dent ;  S.  H.  White,  vice-president  and  treasurer ;  A.  H.  Dillon,  second  vice-president ; 
Halsey  Stevens,  secretary'  ;  and  William  L.Squire,  assistant-secretary.  J.  C.  Walkley 
was  appointed  advisory  counsel,  and  Henry  J.  Furber,  financial  manager.  Furber  and 
Wiggin  were  not  old  associates,  but  were  first  brought  together  in  this  venture. 

]\Ir.  Furber,  whose  ability  no  one  ever  questioned,  went  to  work  at  once  to  intro- 
duce order  and  system,  in  the  place  of  disorder  and  confusion.  He  soon  found  that  he 
had  been  greath'  deceived  as  to  the  condition  of  the  company.  Assets  had  been  over- 
stated, and  liabilities  under-stated.  In  June  he  put  Thomas  M.  Smith,  an  expert,  on 
the  premium  note  account,  with  instructions  to  ascertain  and  report  its  exact  condi- 
tion. Edmund  A.  Stedman,  actuary  of  the  State  Insurance  Department,  went  over 
the  same  ground,  starting  later.  Both  labored  for  months,  and  their  final  footings 
diflfered  by  less  than  $20  ($18.03).  But  the  amount  was  nearly  $1,000,000  less  than 
claimed  in  the  previous  annual  statement.  The  result  was  promptly  reported  to  the 
department,  and  embodied  in  the  next  return. 

^Meanwhile,  the  large  debt  of  the  \'alley  road,  the  Higganum  shops,  the  Saj'- 
brook  Hotel,  the  West  Virginia  mines,  the  claims  against  Allen,  Stephens  &  Com- 
pany, to  say  nothing  of  minor  "investments,"  were  not  only  yielding  no  income, 
but  several  at  best  were  sources  of  vexatious  expense.  The  only  light  ahead  cafne 
from  the  excellent  quality  of  the  insurance  risks  scattered  over  the  country.  And 
now  the  insured  were  learning  how  their  premiums  had  been  locked  up  in  ominous 
speculations. 


86  INSURANCE   IN  CONNECTICUT. 

One  cannot  help  admiring  the  courage  and  fertility  of  resource  with  which  Furber 
met  the  crisis.  The  company  had  a  mortgage  for  $800,000,  taken  in  1875,  on  eight 
parcels  of  property  in  New  York  city,  owned  by  Edward  Mathews,  one  of  the 
largest  holders  of  real  estate  in  the  city.  He  was  greatly  pressed  for  cash.  In 
December,  1876,  Mr.  Furber  bought  from  him  the  eight  pieces,  nearly  all  located  on 
Broadway,  for  ^3,030,000,  releasing  the  company's  mortgage  of  $800,000,  assuming 
prior  mortgages  to  the  amount  of  $948,000,  turning  in  the  second  mortgage  bonds 
of  the  Valley  road  ($1,250,000),  at  $1,047,000,  and  paying  $235,000  in  cash.  The 
trade  was  conducted  under  the  eye  of  Commissioner  Stedman,  who  sent  to  the  New 
York  department  for  an  official  appraisal.  The  superintendent  of  that  state  selected 
Thomas  Knowlton  Marcy,  who  made  his  report  December  9th.  Mr.  Marcy  went 
over  the  records  and  accounts  of  each  piece  with  great  care.  He  found  the  total 
annual  expenses  for  taxes,  insurance,  repairs,  etc.,  to  be  $47,887,  the  income  from 
rooms  actually  rented,  $235,480,  and  the  net  income,  $187,593.  He  fixed  the  appraisal 
at  $3,000,000,  on  which  the  property  was  yielding  net  yearly  revenue  at  the  rate  of 
over  six  per  cent.  (6.24).  Rooms  then  vacant  were  estimated  to  be  worth  $28,500 
additional. 

Similarly  Mr.  Furber  traded  the  Higganum  mortgage,  amounting,  with  interest, 
to  $250,000,  for  productive  property  in  the  heart  of  New  York  city. 

It  should  be  remembered  that  the  winter  of  1876-7  was  the  most  dismal  part  of 
the  long  period  of  depression  which  followed  the  great  financial  panic  of  1873.  An 
undecided  contest  for  the  presidency  of  the  Republic  was  then  piled  on  our  other 
troubles. 

The  New  York  property  received  in  the  trade  is  now  estimated  to  be  worth  over 
eight  millions.  Instead  of  holding  it  for  better  times  the  company  placed  a  price  on 
each  parcel,  and  sold  as  the  market  rose  to  its  figures,  the  best  going  first.  On 
the  other  hand  the  Valley  bonds  never  yielded  a  dollar  of  revenue,  and  in  the 
subsequent  reorganization  of  the  road  were  wiped  out  utterl}'. 

In  January,  1877,  a  petition  signed  by  eleven  influential  policy-holders  was 
presented  to  the  General  Assembly,  asking  that  the  affairs  of  the  company  be  investi- 
gated. This  was  but  a  symptom  of  the  distrust  that  pervaded  the  community. 
Through  the  Guardian  and  the  Universal  Mr.  Furber  had  reinsured  many  weak 
companies.  Thousands  of  poor  people  had  been  induced  to  sell  or  exchange  policies 
for  fractions  of  the  reserve  charged  against  them.  This  process  was  justly  regarded 
in  Connecticut,  and  especially  in  Hartford,  as  one  of  the  most  heartless  and  cruel 
contrivances  ever  devised  for  fattening  the  few  at  the  expense  of  the  many.  Large 
local  interests  in  the  business  had  educated  the  people  to  regard  the  custody  and 
management  of  life  insurance  funds  as  a  most  sacred  trust.  With  such  convictions, 
many  felt  that  the  intrusion  of  the  methods  in  vogue  in  Mr.  Furber' s  New  York 
companies  must  be  prevented  at  all  hazards.  In  March,  1877,  the  superintendent  of 
that  state  began  an  exhaustive  examination  of  the  Universal.  In  July  his  report, 
severely  condemnatory,  was  made  public.  While  the  work  was  in  progress  various 
scraps  of  fact  and  inference  found  their  way  across  the  border,  adding  fuel  to  the  flame. 

As  a  result  of  the  agitation  a  law  was  passed  creating  a  special  commission  to 
investigate  the  life  companies  of  the  state.  It  consisted  of  Origen  S.  Seymour,  H.  M. 
Cleveland  and  David  P.  Nichols.  During  his  life  Judge  Seymour,  the  chairman, 
filled  with  distinguished  credit  a  seat  on  the  bench  of  the  SupremeCourt  of  the  .state. 
He  was  a  man  of  sound  judgment  and  unquestioned  probity.  The  special  commis- 
sion made  a  preliminary  report  to  Commissioner  Stedman,  June  21,  1877,  finding  a 
deficit  of  $2,063,412.38.     In  reaching  the  result  they  reduced  the  appraisal  on  the  two 


INSURANCE   IN   CONNECTICUT.  87 

New  York  city  purchases  from  53,030,000  and  §800,000  to  $1,845,000  and  5505,000 
respectivel}-.  The  special  coininission  discovered  nothing  not  already  known  to  Mr. 
Stednian.  But  the  point  of  view  and  animus  differed.  Mr.  Stedman  saw  that  the 
situation  was  desperate,  and  in  his  anxiety  to  save  the  institution  from  ruin  and  its 
patrons  from  loss,  gave  the  management  the  benefit  of  ever}'  doubt.  On  the  other 
hand,  the  special  commission  (and  we  may  safely  concede  that  both  were  equally 
sincere)  drew  its  inspiration  from  prevalent  distrust  and  hostility. 

The  law  relating  to  the  winding  up  of  insurance  companies  passed  in  1875  left 
it  optional  with  the  commissioner  when  he  found  the  assets  of  any  such  comi)any 
impaired  to  notify  it  to  cease  the  issue  of  new  policies  and  the  payment  of  dividends 
until  the  deficiency  should  be  made  good,  but  in  case  the  assets  were  found  to  be  less 
than  three-fourths  of  the  liabilities  he  was  required  to  apply  to  the  courts  for  the 
appointment  of  a  receiver  and  the  annulment  of  the  charter.  The  commissioner 
consulted  eminent  counsel  and  hesitated.  At  length,  borne  down  by  overwhelming 
pressure,  on  the  14th  of  July,  he  applied  to  Dwight  W.  Pardee,  one  of  the  judges  of 
the  Supreme  Court,  for  the  appointment  of  a  receiver.  An  injunction  was  accord- 
ingly issued.  After  several  adjournments,  July  30th,  by  common  consent  the 
injunction  was  dissolved.  During  the  pendency  of  the  petition  plans  were  arranged 
for  the  transfer  of  the  company  to  other  hands.  On  the  2Sth,  the  old  directors 
resigned  seriatim^  and  the  vacancies  were  immediately  filled  by  the  election  of  Mar- 
shall Jewell,  William  W.  Eaton,  George  P.  Bissell,  Robert  E.  Day  and  Elisha 
Johnson.  George  E.  Hatch  held  over,  and  J.  M.  Allen  was  added  later.  Simulta- 
neously the  old  officers  resigned.  The  new  board  at  once  organized  and  elected 
Marshall  Jewell  president  of  the  company. 

One  of  the  last  acts  of  the  old  regime  before  issue  of  the  injunction  was  to 
borrow  two  hundred  thousand  dollars  of  the  yEtna  Life  by  mortgaging  tlie  Charter 
Oak  building. 

There  is  no  evidence  that  Mr.  Furber  by  word  or  deed  ever  tried  to  deceive  either 
the  commissioner  or  the  special  commission.  His  ways,  avowedly  dictated  solelv  by 
self-interest,  were  bold  and  open.  He  did  not  pose  as  a  Christian,  or  shed  tears  to  be 
seen  of  men  over  the  woes  of  deceived  and  defrauded  polic\'-holders.  Masterful 
in  resource,  if  let  alone  he  would  have  saved  the  company  because  its  rescue  was 
clearly  for  his  interest.  Yet,  whether  it  was  to  live  or  die,  the  part  of  the  community 
who  believe  that  life  should  be  something  higher  and  nobler  than  a  game  of  grab, 
breathed  more  freely  when  this  adept  in  the  game  departed. 

Early  in  July  an  influential  committee  was  raised  to  see  whether  the  ratio  of 
assets  to  liabilities  would  justify-  an  attempt  to  save  the  company  from  a  receivership. 
A  sub-committee,  consisting  of  Colonel  Jacob  L.  Greene,  Thomas  O.  Enders,  Gusta- 
vus  F.  Davis,  and  John  M.  Holcombe,  after  making  as  thorough  an  examination  as 
the  time  permitted,  on  the  25th  of  July  reported  that  economy  and  efficiencv  of 
management,  supported  by  confidence  on  the  part  of  policy-holders,  would  probably 
enable  the  company  to  pay  all  claims  in  full  and  regain  solvency. 

Marshall  Jewell  had  a  national  reputation.  He  was  not  only  successful  in  busi- 
ness, but  had  been  governor  of  the  state,  minister  to  St.  Petersburg,  and  postmaster- 
general.  His  purchase  of  a  large  majority  of  the  stock  and  acceptance  of  the  presi- 
dency promised  to  supply  the  essential  conditions  of  recovery  suggested  by  the  sub- 
committee. But  the  change  came  too  late.  New  business  had  ceased.  Many  policy- 
holders, taking  advantage  of  the  terms  of  the  contract,  demanded  paid-ujj  insurance 
to  the  value  of  their  claims.  While  revenues  were  cut  off,  death  losses  and  expenses 
continued  to  pour  in. 


88  INSURANCE   IN  CONNECTICUT. 

In  September  the  directors  voted  to  scale  the  capital  forty  per  cent.,  and  to  pay 
no  dividends  on  the  balance  for  five  j^ears.  They  also  asked  policy-holders  to  scale 
the  liability  on  that  account  forty  per  cent.,  also  promising  to  restore  the  amount  so 
relinquished,  if  possible,  from  gradual  sales  of  unproductive  property.  Claims  from 
deaths  and  endowments  were  scaled  to  the  same  extent. 

]\Ianv  polic)"-holders  consented  and  many  held  back.  Meanwhile  demands 
upon  the  treasury  far  outran  income.  The  gentlemen  who  had  undertaken  the 
work  of  rescue  became  discouraged.  At  their  suggestion,  commissioner  Stedman 
in  January,  1878,  again  applied  for  a  receiver.  The  legislature  was  in  session, 
and  all  parties  in  interest  now  united  in  asking  for  such  amendments  to  the  charter 
as  would  enable  the  policy-holders  to  re-organize  on  a  purely  mutual  basis.  The 
act  was  passed  and  approved  March  15. 

On  the  iSth  of  April  the  policy-holders  met,  accepted  the  amendments  to  the 
charter,  and  elected  a  board  of  twenty-one  directors.  After  much  persuasion,  George 
M.  Bartholomew  took  the  presidency,  June  3d.  Halsey  Stevens  continued  as  secretary 
till  succeeded  by  Charles  E.  Willardin  June,  '79. 

In  December,  1878,  Messrs.  Wiggin,  Furber,  Walkley  and  White  were  tried  at 
Hartford  before  Judge  James  A.  Hovey  for  conspiracy.  For  the  state  appeared  Wil- 
liam Hamersle}-,  L.  F.  {5.  Foster  and  John  R.  Buck;  for  the  defense,  Leonard  Swett, 
of  Chicago,  Governor  Dorsheimer,  of  New  York,  Daniel  Chadwick,  of  Lyme,  Conn., 
with  Charles  E.  Perkins,  A.  P.  Hyde  and  Lewis  E.  Stanton,  of  Hartford.  The  trial 
lasted  twenty-four  days  and  resulted  in  a  verdict  of  acquittal  for  all  the  defendants. 
A  witness,  whose  testimony  before  the  grand  jurj-  had  been  decisive,  meanwhile  had 
met  with  a  change  of  heart  and  put  himself  beyond  reach  of  the  court. 

After  the  return  home  of  the  invaders  from  New  York  city  Wiggin  presented  to 
Governor  Jewell,  for  adjustment,  a  contract  made  with  President  Walkley,  without 
the  knowledge  of  Furber,  to  run  for  five  years,  and  calling  for  two  and  one-half  per 
cent,  on  all  premium  receipts.  According  to  Wiggin  the  consideration  was  his  share 
in  persuading  Furber  to  put  up  the  famous  ^500,000.  Mr.  White  had  a  like  contract. 
Generosity,  even  colossal  generosity,  in  handling  the  money  of  others,  is  not  an 
uncommon  trait.     The  claim  was  pressed,  but  defeated. 

Mr.  Bartholomew's  consent  to  take  the  presidency  renewed  the  courage  of  all 
parties  in  interest.  Gifted  with  quick  and  keen  perceptions,  he  was  a  man  of  affairs, 
accustomed  to  handle  large  transactions  without  neglecting  details.  He  had  the  full 
confidence  of  the  community  and  was  much  in  demand  for  positions  of  trust.  But, 
as  can  be  seen  now,  the  fight  for  life  was  hopeless  from  the  start.  The  forlorn  condi- 
tion of  the  company  had  been  widely  advertised.  No  upright  and  competent  agent 
would  canvass  for  a  concern  visibly  doomed.  No  one  intelligent  enough  to  make  a 
desirable  risk  would  take  a  contract  from  it.  Following  a  lead  started,  but  soon 
abandoned,  by  President  Winston,  of  the  New  York  Mutual  Life,  the  Charter  Oak 
years  before  had  cut  rates  about  twenty  per  cent.,  and  thus  on  live  policies  was 
deprived  of  the  margin  available  for  repairs.  Maturing  claims  constantly  exceeded 
income.  One  piece  of  property  after  another  was  sold  and  the  proceeds  applied  to 
meet  current  demands.  Its  credit  withered.  To  raise  funds  Mr.  Bartholomew  from 
time  to  time  gave  his  personal  indorsement  to  the  amount  of  over  $2,250,000.  With 
the  moneys  thus  procured  the  company  in  a  single  j-ear  saved  $340,000  by  bu}'ing  up 
claims.  Betweenjuly,  1878,  and  July,  1886,  $6,311,165.17  were  paid  to  policyholders, 
the  number  of  whom  was  reduced  from  about  twenty-two  thousand  to  less  than  ten 
thousand.  Yet  heroic  treatment  failed  to  arrest  the  progress  of  the  disease.  With 
steady  step  creeping  paralysis  drew  near  the  vitals. 


INSURANCIC   IN   CONNECTICUT.  89 

At  length,  in  September,  1885,  Epliraini  Williams,  insurance  commissioner, 
applied  for  a  receiver  on  the  ground  that  the  impairment  of  assets  exceeded  the  legal 
limit  of  twenty-five  per  cent.  The  case,  tried  before  Judge  Granger,  turned  on  valu- 
ations— a  question  prolific  of  wide  diversities  of  opinion.  After  a  contest  of  two 
months  the  suit  was  withdrawn. 

A  year  after  the  application  for  a  receiver,  or  in  September,  1886,  the  final  explo- 
sion came  with  a  sudden  and  dreadful  shock.  Heavy  embezzlements  from  the  Hart- 
ford Silk  Company  and  from  the  Union  Manufacturing  Company  of  Manchester, 
were  brought  to  light  by  the  flight  of  the  person  who  was  both  president  of  the  Silk 
and  treasurer  of  the  Union.  Mr.  Bartholomew  was  president  of  the  Union  Com- 
pan}',  a  director  in  both  and  personally  a  heavy  endorser  of  their  paper.  At  a  spe- 
cial meeting  of  the  directors  of  the  Charter  Oak,  held  September  i8th, 

"  ]\Ir.  Bartholomew  stated  that  for  some  time  he  had  had  in  his  hands,  as  a  matter  of  protec- 
tion from  annoying  attachments,  a  large  amount  of  the  companj-'s  funds  ;  that  he  had  held  him- 
self ready  to  pay  over  these  funds  to  the  company  as  needed,  although  he  had  not  kept  them  dis- 
tinct and  intact ;  that  now,  owing  to  his  embarrassment  growing  out  of  the  troubles  of  the  Hart- 
ford Silk  INIanufacturing  Compan}^  for  which  he  was  a  heavy  endorser,  he  found  himself  unable 
to  pay  this  company  the  amount  due  them  ;  that  he  had  handed  to  the  secretary,  as  collateral  se- 
curity for  this  debt,  certain  securities  which  he  believed  would  in  time,  at  least,  be  worth  the  full 
amount  of  his  indebtedness.  Mr.  Bartholomew  said  further  that  he  deemed  it  necessary  to  make 
some  temporary  arrangement  for  protecting  the  company  and  continuing  its  business." 

Possessing  unlimited  credit,  reticent,  self-centred  and,  till  awakened  too  late  to 
the  error,  confident  of  ability  to  meet  every  demand  upon  him  as  occasion  arose,  INIr. 
Bartholomew  suddenly  found  himself  unable  to  do  so.  During  a  long  career  he  had 
signed  many  bonds  of  indemnity,  especially  for  young  men,  and  had  indorsed  paper 
to  the  amount  of  many  millions. 

September  20th  Mr.  Bartholomew  resigned.  The  board  directed  its  counsel, 
Charles  E.  Gross,  to  apply  for  a  receiver.  There  was  no  opposition.  Judge  Pardee 
selected  in  succession  Jonathan  B.  Bunce  and  Robert  E.  Day.  Both  declined.  He 
then  appointed  Isaac  Brooks,  of  Torrington,  and  Edmund  A.  Stedman,  of  Hartford, 
who  both  qualified. 

Thus  from  mortal  wounds  inflicted  twelve  or  fifteen  years  before,  an  institution 
once  strong  and  promising,  was  brought  to  the  grave. 

After  many  delays  a  dividend  to  policy-holders  of  fifteen  (15)  per  cent.,  amount- 
ing to  $458,775.49,  was  paid.  Januarj'  22,  1897,  the  court  made  a  final  order  distrib- 
uting the  rest  of  the  assets  ($105,747.21)  in  payment  of  sundr\' expenses  aird  fees, 
and  a  last  dividend  of  three  and  one-fourth  per  cent,  to  policy-holders. 

When  the  impairment  of  assets,  caused  by  the  recklessness  of  the  Walkley- 
White  regime^  was  first  brought  to  light,  both  the  company  and  a  large  percentage, 
if  not  the  full  amount  of  claims  of  policy-holders,  could  have  been  saved  had  the 
law  been  less  mandatory  and  left  a  wider  range  to  the  discretion  of  the  commis- , 
sioner.  Had  it  come  within  the  power  of  the  oflfice  to  substitute  a  competent  for  an 
incompetent  management,  and  to  enforce  such  slight  scaling  of  claims  as  would  have 
restored  technical  solvency,  the  beneficiaries  under  its  contracts  would  have  received 
nearly  their  full  dues  instead  of  the  beggarly  driblets  that  finally  reached  them. 


90  INSURANCE   IN  CONNECTICUT. 

CHAPTER    X. 

INSURANCE  IN  CONNECTICUT— Continued. 

THE  ^TNA  LIFE  INSURANCE  COMPANY  (hARTFORD). 
'HE  year  after  its  incorporation,  in  1819,  the  ^tna  (Fire)  Insurance  Company 
obtained  an  amendment  to  its  charter,  authorizing  it  to  grant  annuities,  upon 
an  additional  capital  not  exceeding  $150,000,  to  be  held  as  a  separate  guar- 
anty for  the  liabilities  arising  under  the  business.  The  privilege  was  never 
exercised.  In  1850,  by  a  second  amendment,  the  ancillary  company  was 
empowered  to  grant  insurance  upon  lives,  and  thirty  years  after  the  inception  of  the 
original  plan,  organized  as  the  .E^tna  Insurance  Company  Annuity  Fund.  Rights  to 
subscribe  were  distributed  among  tlie  owners  of  the  parent  company  in  proportion 
to  their  holdings.  Officers  of  both  were  the  same,  certain  directors,  with  Eliphalet 
A.  Bulkeley  as  chairman,  having  been  delegated  to  manage  the  affairs  of  the  new 
department. 

After  a  brief  experience,  it  was  thought  best  that  the  control  of  the  two  institu- 
tions should  be  made  separate  and  distinct,  and  accordingly,  in  July,  1853,  by  still 
another  amendment  to  the  cliarter,  the  child  was  launched  on  its  independent  career 
under  the  name  of  the  ^E^tna  Life  Insurance  Company.  Original  directors  were 
E.  A.  Bulkeley,  Austin  Dunham,  H.  Z.  Pratt,  Lawson  C.  Ives,  Mark  Howard,  John 
Warburton,  Roland  ]\Iather,  S.  L.  Loomis,  J.  W.  Seymour  and  W.  H.  D.  Callender. 
E.  A.  Bulkeley  was  chosen  president,  and  John  W.  Seymour,  secretary. 

During  the  first  decade  of  its  existence  the  company  developed  slowly.  It  will 
be  remembered  that  a  period  of  long,  and  at  times  severe,  financial  depression 
preceded  the  war — a  condition  that  bore  heavily  upon  new  enterprises,  and  brought 
to  both  new  and  old  widespread  mortality. 

Till  1 861  all  contracts  for  insurance  made  by  the  /Etna  Life  were  written  on 
the  proprietary  plan.  It  then  began  to  issue  participating  policies,  and  established  a 
mutual  department  under  the  same  control,  but  with  entirely  distinct  books,  accounts, 
and  investments.  Since  then  applicants  have  had  their  choice  between  the  two 
methods.  Till  1868  patrons  on  the  mutual  side  were  allowed  to  pay  a  part  of  the 
premiums  by  note,  a  system  once  quite  popular,  but  under  plans  then  matured  all 
subsequent  contracts  have  required  payments  in  cash. 

One  of  the  first  effects  of  the  war  was  to  aggravate  the  depression  previously 
existing.  As  it  went  on,  and  issues  of  paper  currency  stimulated  speculation  and 
extravagance  not  less  than  legitimate  business,  the  life  companies  already  in  the 
field  soon  began  to  profit  from  changed  conditions.  Large  numbers  of  men  rushed 
into  hazardous  ventures,  and  amid  the  uncertainties  of  their  private  affairs,  made 
provision  for  their  families  by  taking  out  heavy  lines  of  insurance.  Others  of  more 
prudent  habits  were  influenced  by  the  example  to  investigate  the  merits  of  the 
system,  and  to  avail  themselves  of  the  same  protection.  Inquiry  could  not  fail  to 
satisfy  the  mind  that  the  principles  were  sound,  or  that  any  well-managed  company 
must  always  be  in  a  position  to  meet  maturing  obligations.  The  sudden  popularity 
of  life  insurance  was  due  partly  to  more  urgent  need  of  its  benefits,  and  partly  to 
more  thorough  comprehension  of  the  subject. 

Nowhere  is  the  greatness  of  the  change  in  the  attitude  of  the  public  towards 


IHOS.  O.  ENDF.US, 
President  1872-79. 


JOF.L  L.  ENGLISH, 
Secretary  1872, 


K  A.  BULKKLEV,  Trcst.  1850-1S72 
Prest.  Conn.  Mutual  Life.  Ins.  Co., 
1846-48. 


MORGAN'  G.  BULKELEV, 
President   1879. 


JOHN  C.  WEBSTER, 
Vice-President  1879. 


H.  W.  ST.  JOHN, 
Actuary  1867. 


G.  W.  RUSSELL,  M.  D. 
Medical  Director  1850. 


/F.TNA    LIFE   INSURANCE   COMPANY, 


INSURANCE    IN   CONNECTICUT.  91 

life  insurance  more  clearly  reflected  than  in  the  records  of  the  ^"Etna.  In  1S63, 
thirteen  years  from  the  date  of  organization,  its  assets  amounted  to  ^310,492.  In 
1866  they  had  risen  to  $2,036,823.  The  impetus  then  given  to  the  development  of  the 
company  was  stimulated  and  multiplied  by  the  energy  of  the  management.  Its  subse- 
quent growth  in  resources  and  surplus,  in  reputation  and  popularity,  has  never  for  an 
instant  been  checked  by  adversities  of  any  nature,  or  troubles  from  any  quarter.  It 
has  been  singularly  fortunate,  too,  in  avoiding  the  errors  of  judgment  which  intelli- 
gence and  prudence  may,  without  discredit,  be  expected  to  make  under  the  law  of 
averages.  In  1868  its  assets  had  increased  to  $7, 538,612  ;  in  1878,  to  $24,141,125  ;  in 
1888,  to  $^2,  620,676;  and  in  1897,  to  $45,557,272.  Its  surplus  January  i,  1875,  was 
$1,561,810  ;  and  gaining  each  year  during  the  next  two  decades,  reached  36,71 1,502, 
on  Jannars-  i,  1S97. 

Success  far  transcending  the  dreams  of  the  founders,  and  on  the  whole,  perhaps, 
unsurpassed  in  the  records  of  lifi?  insurance,  viewed  in  the  light  of  strength  rather 
than  size,  either  in  Europe  or  America,  is  easily  explained.  One  of  the  postulates  of 
the  business  demands  that  investments  shall  yield  an  annual  income  of  four  per  cent., 
the  excess  being  available  either  for  immediate  distribution  among  the  insured,  or 
for  building  up  a  fund  held  in  reserve  to  meet  claims  maturing  possibly  many  years 
later,  when  the  rate  of  interest  on  approved  security  will  certainly  fall  below  tliat 
figure.  The  -iEtna  Life  was  a  pioneer  in  loaning  to  western  farmers,  having  entered 
the  field  under  highly  favorable  conditions.  At  the  time  when  its  treasury  began  to 
be  distended  by  the  volume  of  inflowing  premiums,  the  Illinois  Central  Railway  had 
a  large  number  of  outstanding  contracts  with  settlers  on  their  lands,  agreeing  to 
convey  titles  on  payment  of  the  purchase  money.  Both  sides  desired  the  completion 
of  the  contracts.  At  this  juncture  the  J-^tna  Life  came  forward  and  furnished  the 
needful  funds,  taking  mortgages  on  the  farms  as  security.  All  the  early  loans  bore 
interest  at  ten  per  cent.  The  arrangement  proved  highl}-  advantageous  to  both 
lender  and  borrower.  The  fertility  of  the  soil  attracted  heavy  immigration,  with 
consequent  enhancement  in  the  value  of  the  properties.  While  the  company  had 
abundant  reason  to  be  satisfied,  thousands  of  farmers  rose  from  poverty  to  wealth  by 
the  aid  thus  afforded  them.  As  the  region  grew  rich  and  the  loans  were  paid  off",  the 
company  pushed  westward  into  Iowa,  repeating  the  process  on  the  same  terms. 
Employing  only  trained  and  faithful  agents,  it  seldom  met  with  defaults,  and  when 
compelled  to  foreclose,  generally  succeeded,  by  patience,  in  drawing  a  profit  from  the 
transaction.  The  perils  of  growing  competition  were  met  by  increase  of  carefulness, 
one  of  the  rules  being  to  loan  in  no  case  in  excess  of  the  value  assessed  for  taxation. 

In  view  of  the  good  fortune  that  has  attended  the  farm  loans  of  the  company,  it 
is  not  singular  that  this  has  continued  to  be  with  it  a  favorite  form  of  investment.  On 
January  i,  1897,  it  had,  thus  placed,  §25,200,422,  secured  by  over  seventeen  thousand 
mortgages  on  as  many  separate  blocks  of  real  estate,  representing  a  total  value  of 
over  $105,000,000.  On  the  few  foreclosures  that  have  occurred  the  books  show  a 
balance  for  the  credit  side. 

While  loanable  funds  were  much  less  abundant  than  now,  the  ALtna  Life  also 
invested  largely  in  the  bonds  of  prosperous  cities  at  the  West,  bearing  seven  and 
seven  and  three-tenths  per  cent,  interest.  On  transactions  involving  many  millions 
the  losses  were  few  and  small.  The  surplus  annually  accruing  from  investments  of 
extraordinary  productiveness  enabled  the  company  to  return  generous  dividends  to 
the  participating  policy-holders,  which  in  turn  stimulated  growth  in  new  business, 
and  added  to  the  tide  of  inrolling  premiums. 

Its  risks  have  been  confined  to  the  healthiest  parts  of  the  northern  states  and 
Canada,  where  the  death  rate  is  comparatively  small. 


92  INSURANCE   IN   CONNECTICUT. 

The  capital  remained  at  ^150,000  till  1S78.  With  over  twenty-four  millions  of 
assets  and  nearly  two  and  three-fourths  millions  of  surplus,  the  company  then 
petitioned  the  General  Assembly  for  authority  to  increase  the  capital  to  an  amount 
not  exceeding  ^750,000,  and  the  charter  was  amended  accordingly.  The  act  required 
the  increase  to  be  made  from  such  surplus  funds  as  were  derived  from  business  done 
upon  the  non-participating  stock  plan  of  insurance,  and  to  have  the  approval  of  the 
state  commissioner.  Dividends  were  limited  to  ten  per  cent,  per  annum,  and  con- 
tributions for  this  purpose  from  the  mutual  department  were  limited  to  $9,000  per 
annum.  The  capital  stood  at  $750,000  from  1878  till  1883,  when  the  General 
Assembly  again  amended  the  charter  authorizing  a  further  increase  to  $2,000,000. 
It  was  increased  May  16,  1883,  to  $1,000,000;  January  i,  1887,  to  $1,250,000;  July 
13,  1892,  to  $1,500,000  ;  and  July  i,  1895,  to  $1,750,000. 

Eliphalet  Adams  Bulkeley  continued  at  the  head  of  the  company  from  its 
inception  till  his  death  February  13,  1872.  He  was  born  in  Colchester,  Conn.,  June 
20,  1803,  graduated  at  Yale  College  in  1824,  striding  law  with  William  P.  Williams, 
of  Lebanon,  and  about  1830  opened  an  office  in  East  Haddam,  where  he  was  also 
president  of  the  local  bank.  Thence  he  was  elected  to  both  branches  of  the  General 
Assembly.  In  1847  he  moved  to  Hartford,  where  he  formed  a  law  partnership  with 
Henry  Perkins  under  the  firm-name  of  Bulkeley  &  Perkins.  He  was  first  judge  of 
the  local  police  court,  school  fund  commissioner,  and  in  1857  speaker  of  the  House 
of  Representatives.  He  was  one  of  the  organizers  and  first  president  of  the  Con- 
necticut Mutual  Life.  Later  the  /Etna  absorbed  his  energies,  while  incidentally  as 
director  he  was  connected  with  many  other  corporations.  He  was  noted  for  punctu- 
ality and  for  the  personal  care  given  to  all  matters  which  legitimately  claimed  his 
attention. 

Thomas  Ostram  Enders,  immediate  successor  of  Judge  Bulkeley,  was  born  in 
Glen,  N.  Y.,  September  21,  1832.  He  became  interested  in  insurance  through  John 
G.  North,  of  Meriden,  who  employed  him  as  solicitor.  He  movpd  to  Hartford,  and 
at  the  age  of  twenty-two  took  a  clerkship  in  the  ^tna  Life,  and  was  elected  secre- 
tary four  years  later.  His  industry,  fidelity  and  remarkable  aptitude  for  the  business 
contributed  largely  to  win  phenomenal  success  for  the  company.  To  build  this  up 
he  sacrificed  himself.  Severe  toil,  carried  often  late  into  night,  broke  down  his 
health,  and  shortened  his  days.  In  1879  he  resigned,  and  rested  for  two  years.  In 
1 88 1  he  took  the  presidency  of  the  United  States  Bank,  then  called  the  U.  S-  Trust 
Company.  At  the  time  it  was  suffering  from  old  losses,  and  the  stock  was  quoted  at 
sixty  or  less.  Under  his  guidance  it  shot  rapidly  ahead.  When  he  resigned  in  1S92, 
the  bank,  in  percentage  of  surplus,  value  of  shares,  and  ratio  of  deposits  to  capital, 
held  the  lead  in  the  city  by  a  long  inter\'al.  Mr.  Enders  had  his  residence  over  the 
line  in  West  Hartford.  He  represented  that  town  in  the  General  Assembly  for  the 
sessions  of  1889  and  1891.     He  died  June  21,  1894. 

On  the  retirement  of  Mr.  Enders,  Morgan  G.  Bulkeley,  son  of  the  founder, 
became  president.  Born  December  26,  1837,  and  educated  in  the  public  schools  of 
Hartford,  he  began  his  business  career  in  a  mercantile  house  of  Brooklyn,  N.  Y.,  in 
1 85 1,  rising  in  seven  years  from  the  grade  of  errand  boy  to  partner.  When  the  war 
came,  he  enlisted  in  the  Thirteenth  New  York  regiment,  and  went  to  the  front.  On 
the  death  of  his  father  in  1872,  large  local  interests  brought  him  back  to  Hartford, 
where  he  served  in  both  branches  of  the  city  government,  and  for  eight  years  as 
mayor,  looking  closely  and  intelligently  after  the  financial  and  other  interests  of  the 
public.  In  1888  he  was  elected  governor  of  Connecticut,  and,  owing  to  the  dead- 
lock between  the  two  branches  of  the  General  Assembly  that  convened  in  January, 


INSURANCE   IN   CONNECTICUT.  93 

1 89 1,  he  held  over,  under  the  Constitution,  for  a  second  term  of  two  years.  Wliile 
Governor  Bnlkeley  has  devoted  much  time  to  the  public,  fi<;^ures  show  tliat  the  inter- 
ests of  the  /Etna  Life  have  not  suffered. 

Vice-presidents  have  been  :  J.  W.  Seymour,  1856-7  ;  John  Warburton,  1857-60; 
S.  L.  Ivoouiis,  1860-63;  Austin  Dunham,  1863-77;  W.  H.  Bulkele\-,  1877-9;  and  J. 
C.  Webster,  since  1879.  The  position  was  honorary  till  1879.  Mr.  Webster  has 
served  the  company  since  1865,  having  been  general  agent  and  superintendent  of 
agencies  before  taking  the  vice-presidency.  Secretaries  have  been  :  J.  W.  Seymour, 
1853-5;  Samuel  Coit,  1855-8;  Thomas  O.  Enders,  1858-72;  and  since  1872,  J.  L- 
English,  whose  entry  into  business  was  made  with  the  company  in  1867.  The  posi- 
tion of  assistant-secretary  was  created  in  February,  1890,  and  was  filled  by  George 
W.  Hubbard,  an  employee  for  a  quarter  of  a  century,  till  his  death,  October  13,  1893. 
He  was  succeeded  by  Charles  E.  Gilbert.  Dr.  Gurdon  W.  Russell,  as  examining  and 
consulting  physician,  has  been  connected  with  the  medical  department  from  the  start. 
Dr.  James  Campbell  was  elected  medical  examiner,  February  13,  1894,  working  in 
connection  with  Doctor  Russell.  Howell  W.  St.  John,  the  present  imcumbent,  was 
appointed  actuary  in  October,  1867.  Except  from  death,  very  few  changes  have 
occurred  in  the  official  corps. 

Under  the  general  statutes  the  /Etna  Life  opened  an  accident  department,  Jan- 
uary I,  1 89 1.  Just  six  years  later  it  had  in  force  eighteen  thousand,  five  hundred 
and  thirty-two  policies,  instiring  ;g79,o83,850.  Vice-president  Webster  has  immediate 
charge  of  this  branch  ;  Walter  C.  Faxon,  also  connected  with  it,  was  made  assistant 
secretary'  in  October,  1893. 

RECEIPTS  TILL  JANUARY    I,    1S97. 

Premiums $123,971,464.75 

Interest 45,866,940.55 

Total §169,838,405.30 

DISBURSEMENTS  TO   POLICY-HOLDERS. 

Death   losses $42,833,641.22 

IMatured  endowments 17,623,658.64 

Surrender  values  paid 20,650,164.27 

Dividends  to  policy-holders 18,590,343.88 

Total $99,697,808.01 

Niimber  of  policies  in  force  January  i,  1897,  eighty-seven  thousand,  six  hundred 
and  fifty-eight,  insuring  $145,635,940. 

In  econoiu)'  of  management  the  /Etna  Life  ranks  with  the  first  three  or  four  of 
American  companies.  It  began  upstairs  in  a  small  room  on  State  street  under  the 
wings  of  its  elder  brother,  the  yEtna  Fire. 

John  C.  Webster,  vice-president,  was  born  at  Kingfield,  Me.,  May  24,  1839. 
Equipped  with  a  good  English  education,  he  learned  the  printer's  trade,  and  before 
reaching  the  age  of  twenty-two  was  at  the  head  of  one  of  the  largest  printing  offices 
in  Concord,  N.  H.  In  1864  he  became  agent  of  the  /Etna  Life  in  that  city,  and  soon 
after  general  agent  for  the  state  of  New  Hampshire.  In  1873  he  was  made  superin- 
tendent of  agencies,  when  he  moved  to  Hartford.  He  has  been  vice-president  since 
July,  1879.  For  fifteen  years,  up  to  1895,  he  edited  the  .'Etna,  a  quarterly  publication 
devoted  to  the  interests  of  the  company.  He  organized  and  has  had  throughout 
special  supervision  of  the  accident  department. 

Joel  L.  English,  born  October  i,  1843,  at  Woodstock,  Vt.,  in  1867  entered  the 
Hartford  office  of  the  .^tna  Life  as  a  clerk,  and  was  appointed  secretan,-  in  1872.     In 


94  INSURANCE   IN  CONNECTICUT. 

this  single  company  his  life  has  been  devoted  to  the  j^erformance  of  a  ceaseless  round 
of  duties.  While  a  life  of  quiet  work  ma}-  be  bare  of  dramatic  incidents,  Mr.  English 
is  regarded  by  the  profession  as  one  of  its  most  accomplished  members. 

Howell  W.  St.  John,  actuary,  was  born  at  Newport,  R.  I.,  in  April,  1834.  After 
graduating  from  Yale  University  as  a  civil  engineer,  he  pursued  the  profession  in 
the  South  and  West  until  October,  1867,  when  he  became  actuary  of  the  /Etna  Life. 
He  is  one  of  the  charter  members  of  the  Actuarial  Society  of  America,  was  its  presi- 
dent in  1893  and  1894,  and  one  of  its  delegates  to  the  International  Convention  of 
Actuaries  held  at  Brussels  in  September,  1895. 

Charles  E.  Gilbert,  assistant  secretary,  was  born  in  Wallingford,  Conn.,  November 
8,  1 836.  During  the  war  he  was  employed  in  the  offices  of  the  mustering  officer  and 
the  military'  commandant  of  Connecticut  and  Rhode  Island.  In  1868  he  was  made 
cashier  of  the  yEtna  Life  and  assistant  secretary  in  February,  1895. 

With  customary  good  fortune  in  1888  the  ^Etna  Life  acquired  for  $231,000  the 
commodious  and  elegant  building  erected  by  the  Charter  Oak  Life,  at  a  cost  by  the 
books  of  $844,380.  The  home  offices  were  transferred  to  the  new  quarters  in  the 
summer  of  that  year.  The  marvelous  growth  of  the  .E^tna  Life  cannot  be  repeated 
in  the  future  by  any  similar  organization,  because  the  conditions  which  rendered  the 
process  possible  have  passed  never  to  return. 

THE   PHCENIX   MUTUAL  LIFE  INSURANCE  COMPANY  (HARTFORD). 

Proceeding  on  the  theor}'  that  total  abstainers  from  the  use  of  alcoholic  drinks 
could  safely  be  insured  at  lower  rates  than  miscellaneous  risks,  accepted,  without 
close  regard  to  personal  habits,  a  number  of  men,  connected  for  the  most  part  with 
the  temperance  reform,  in  185 1  secured  a  charter  for  the  American  Temperance  Life 
Insurance  Company.  The  incorporators  were:  Barzillai  Hudson,  a  prominent  leader 
in  the  crusade  against  alcohol;  Benjamin  E.  Hale,  editor  of  the  /vw;;/^?;'//,  a  cold-water 
sheet ;  Thomas  S.  Williams,  ex-chief  justice  of  the  Connecticut  Supreme  Court ; 
Francis  Gillette,  a  noted  abolitionist  in  the  formative  period  of  the  party,  and  for  a 
year  in  the  United  States  Senate  ;  James  B.  Hosmer,  philanthropist,  who  left  large 
sums  for  public  uses  ;  Francis  Parsons,  a  prominent  lawyer  ;  and  Edson  Fessenden, 
keeper  of  the  Eagle  Hotel. 

The  capital  was  placed  at  g  100,000,  divided  into  shares  of  S50  each,  with  power 
to  increase  to  $200,000.  Ten  per  cent,  was  required  at  the  time  of  subscribing,  six 
per  cent,  within  twenty  days  after  organization,  and  the  balance  was  allowed  to  rest 
in  stock-notes. 

Books  were  opened  July  22d  by  H.  S.  Ramsdell,  Andrew  T.  Judson  and  A.  I\I. 
Collins,  commissioners,  and  were  closed  at  noon  the  next  day  when  it  was  found  that 
twenty-three  hundred  and  forty-three  shares  of  $50  each  had  been  taken.  The 
number  was  scaled  to  two  thousand.  On  the  24th  the  subscribers  met  at  the  Foun- 
tain office  and  elected  for  directors  B.  Hudson,  J.  B.  Hosmer,  T.  Wadsworth,  F.  Par- 
sons, Albert  Day  and  John  H.  Goodwin.  B.  E.  Hale  was  elected  secretary  for  the 
year  ensuing  on  the  same  ballot.  In  the  afternoon  the  directors  chose  B.  Hudson 
president,  and  Tertius  Wadsworth  vice-presiderit.  On  the  28th  the  board  already 
elected  chose  four  additional  members,  viz. :  W.  W.  Hoppen,  Noah  Wheaton,  Francis 
Gillette  and  Edson  Fessenden. 

August  4th  by-laws  were  adopted.  The  distinctive  article  provides  that  the 
company  shall  take  no  risks  upon  the  lives  of  persons  addicted  to  the  habitual  use 
of  intoxicating  liquors  as  a  beverage. 

Moved  by  strong  convictions,  advocates  of  temperance  gladly  accepted  an  oppor- 


INSURANCE   IN  CONNECTICUT.  <J5 

tunity  to  subject  their  beliefs  to  a  practical  and  perhaps  decisive  test.  Accordingly, 
tables  were  prepared  gradualiiig  the  cost  of  insurance  about  ten  per  cent,  below  cur- 
rent rates,  and  the  issue  of  policies  began.  All  premiums  were  at  first  required  in 
cash.  Had  the  scheme  met  with  popular  favor  perhaps  the  correctness  of  the  theory 
would  have  been  demonstrated.  However,  persons  interested  in  the  cause  did  not 
hasten  to  seize  the  privilege,  and  others  did  not  care  to  sign  a  pledge  of  perpetual 
abstinence  in  consideration  of  the  discount.  Solicitors  found  the  restrictions  placed 
upon  the  freedom  of  the  individual  an  ever-present  obstacle,  blocking  the  persuasive 
force  of  their  eloquence.  Satisfied  after  a  fair  trial  that,  however  correct  the  prin- 
ciple might  be,  the  attempted  application  of  it  ran  counter  to  the  inclinations  of 
human  nature,  the  managers  abandoned  the  temperance  feature  in  1861,  conformed 
the  rates  and  contracts  to  the  common  practice,  and  with  legislative  permission, 
changed  the  name  to  the  Phoenix  Mutual  Life  Insurance  Company. 

Many  of  the  risks  taken  under  the  original  plan  still  remain  on  the  books,  and 
as  a  whole  have  perhaps  justified  the  opinions  of  the  founders  in  regard  to  the 
greater  longevity  of  those  who  entirely  avoid  spirituous  drinks. 

October  5,  1852,  Benjamin  E.  Hale  was  chosen  president  for  the  rest  of  the  year, 
and  James  H.  Holcomb,  secretary.  Mr.  Hale  resigned  February  23,  1853,  to  take 
the  general  agency  of  the  company,  and  was  succeeded  by  Edson  Fessenden.  Mr. 
Holcomb  also  resigned,  and  declining  a  re-election,  was  succeeded  by  J.  Augustus 
Wright,  March  14th.  W.  H.  Hill  was  secretary,  April,  '57-July,  '65,  and  James  F. 
Burns,  July,  '65-June,  '75.  The  company  decided  to  conduct  its  business  on  the 
mutual  principle  and  to  treat  the  stock  as  a  guaranty  capital,  entitled  only  to  six  per 
cent,  a  year,  the  legal  rate  of  interest. 

The  early  progress  of  the  company  was  slow.  In  June,  1861,  when  the  experi- 
ment of  insuring  only  the  strict!}-  temperate  was  abandoned,  its  gross  assets  amounted 
to  3262,088.40.  For  the  previous  year  premiums  reached  548i704-02  and  income 
from  investments,  ;g  10, 749.81.  With  change  of  method  and  the  stimulus  given  to 
all  activities  by  the  Civil  War,  came  rapid  growth.  Imitating  a  popular  feature  of 
the  time,  it  gave  up  the  wholly  cash  requirement,  accepting  part  payment  in  notes. 

The  panic  of  1873,  followed  by  six  years  of  sore  depression,  brought  ruin  upon 
many  insurance  companies  both  life  and  fire.  All  interests  suffered.  Even  the 
savings  banks  of  New  England  and  of  our  older  states,  though  placed  by  law  under 
severe  restraint  and  strict  supervision,  sustained  heav}-  losses  from  shrinkage  of  securi- 
ties, and  the  strongest  were  forced  to  reduce  the  rate  of  dividend  from  six  to  four  per 
cent,  a  year.  Some  failed.  Some  pulled  through  by  scaling  their  liabilities.  As 
prices  soared  skyward  during  the  outpour  of  inconvertible  paper  currency  giving  to 
business  of  all  kinds  a  delusive  appearance  of  prosperity,  so  they  sank  again  toward 
the  cold  bed-rock  of  reality,  when  the  financial  drunk  came  slowly  to  an  end. 

The  Phoenix  suffered  not  only  from  general  causes,  but  from  the  payment  of 
excessive  dividends,  or  return  premiums  to  policy-holders.  For  a  long  period  these 
were  fixed  at  thirt}-three  per  cent,  on  the  temperance  and  fifty  per  cent,  on  the  other 
tables.  Managers  sought  to  win  business  by  giving  patrons  larger  returns  than  their 
rivals.  At  times  the  strife  became  fairly  frenzied.  When  pushed  to  extremes  the 
policy  took  away  the  main  resource  for  making  good  the  general  shrinkage  of  prices 
that  fell  upon  all  interests,  and  often  from  unexpected  quarters. 

For  the  above  reasons  the  situation  of  the  Phoenix  in  1875  was  serious,  but  not 
alarming.  The  statement  of  its  condition  on  December  31,  1874,  showed  admitted 
assets  of  $10,011,876,  including  $16,000  paid  in  on  capital  account  and  a  surplus  as 
regards  policy-holders  of  $339,866. 


96  INSURANCE   IN   CONNECTICUT. 

Secretary  Burns  was  the  real  executive  officer.  His  methods  were  not  approved 
bj^  Aaron  C.  Goodman,  with  one  exception  the  largest  stockholder,  and  long  a  non- 
resident director.  In  early  manhood  Mr.  Goodman  was  a  bookseller  and  book-pub- 
lisher in  Hartford.  Later  he  opened  a  paper  warehouse  in  New  York  city  and 
carried  on  a  large  and  lucrative  business.  In  1873  he  returned  to  Hartford.  He  now 
became  a  constant  attendant  at  the  meetings  of  directors,  where  his  free  criticisms 
provoked  the  ire  of  the  secretary  and  occasionally  ruffled  the  temper  of  the  president. 

A  plan  was  arranged  to  displace  the  obnoxious  director  at  the  annual  meeting  in 
June,  1875.  The  proposed  victim  got  wind  of  the  plot  and  resolved  not  to  be  sacri- 
ficed in  that  way.  He  offered  his  shares  to  several  prominent  directors,  and  failing 
to  get  a  bid,  took  the  opposite  course  and  so  added  to  his  interests  as  to  secure  prac- 
tical control.  His  purchases  included  a  block  of  three  hundred  and  ninety-seven 
shares  from  Mr.  Fessenden.  At  the  election  a  few  days  later  Mr.  Goodman  was 
chosen  president  ;  Jonathan  B.  Bunce,  vice-president ;  and  John  M.  Holcombe  secre- 
tary. Heretofore  the  vice-president  had  held  an  honorary  title.  He  was  now  made 
a  member  of  the  working  staff. 

Under  the  rigid  scrutiny  of  the  new  officers,  an  alleged  surplus  of  over  ^300,000 
before  the  end  of  December  was  changed  into  a  deficit  of  ^79,000 — a  change  very 
painful  to  the  incoming  management,  and  due  not  to  current  shrinkages,  but  to  the 
correction  of  past  errors.  To  fill  the  gap  the  directors  required  payment  of  the  stock 
notes,  amounting  to  ^84,000. 

The  affairs  of  the  company  were  found  to  be  in  great  confusion.  Many  months 
of  arduous  labor  passed  before  its  exact  condition  was  reached.  Not  only  had  a 
great  deal  of  worthless  stuff  been  carried  to  the  credit  of  assets,  but  still  larger  sitms 
on  sundry  classes  of  policies  had  been  dropped  from  the  liabilities,  though  the"  com- 
pany was  responsible  for  the  claims.  As  the  truth  was  reached  the  books  were 
corrected.     Troubles  came  to  light  one  by  one,  and  hence  were  more  easily  borne. 

The  statment  of  December  31,  1875,  represented  the  financial  condition  as  then 
understood.  Many  policy  liabilities  were  afterwards  discovered  and  restored.  New 
by-laws  were  framed  and  adopted.  A  department  for  insuring  at  lower  rates  on  the 
stock  plan  was  put  in  operation.  Real  estate  taken  by  foreclosure  was  gradually  sold, 
and  for  the  most  part  without  loss.  After  the  annual  statement  of  December,  1878, 
the  chief  drain  on  resources  came  from  the  restoration  of  policies  that  under  the 
previous  management  had  dropped  from  acknowledged  liabilities.  From  these 
causes,  several  years  elapsed  before  the  management  could  claim  with  confidence  a 
solid  surplus. 

When  the  crisis  was  safel)'  passed,  it  became  manifest  that  the  company  had 
fallen  into  a  chronic  habit  of  attending  to  repairs  instead  of  new  construction. 
While  the  volume  of  assets  from  1875  to  1888  remained  nearly  stationary,  the  sur- 
plus grew  from  ^4,679  to  ^1,318,537,  and  the  insurance  in  force  fell  from  over  sixty- 
nine  to  less  than  twenty-five  millions. 

President  Goodman,  who  owned  one  thousand  and  two  shares,  and  thus  a  con- 
trolling interest,  desired  to  sell  on  account  of  ill-health.  Early  in  1889,  William 
Barnes,  ex-superintendent  of  the  insurance  department  of  New  York,  after  various 
preliminary  negotiations,  introduced  John  J.  McFarlane,  of  Philadelphia,  to  Mr. 
Goodman.  Mr.  McFarlane  offered  ^500  a  share  for  Mr.  Goodman's  holdings.  He 
claimed  that  as  he  had  decided  to  go  into  life  insurance  on  a  larger  scale,  he  could 
afford  to  spend  this  sum  for  a  well-established  plant,  as  the  outlay  would  be  much 
less  than  the  cost  of  reaching  equal  strength  from  fresh  beginnings.  He  brought 
letters  of  indorsement  from  reputable  people.     His  backers  described  him  as  an  ex- 


INSURANCE   IN   CONNECTICUT.  97 

member  of  the  State  Senate  of  Pennsylvania,  an  elder  in  the  Presbyterian  Church, 
a  Prohibitionist ;  in  short,  as  variously  virtuous.  At  the  above  figures  for  a  limited 
time  he  obtained  an  option  on  the  entire  block. 

Inquiries  on  the  part  of  persons  interested  in  the  company  and  in  the  city  satis- 
fied them  that  the  proposed  purchaser  was  not  a  man  to  whom  could  safely  be 
committed  the  custody  of  many  millions  of  trust  funds.  As  the  discussion  pro- 
ceeded the  conviction  deepened  that  a  large  body  of  assets  controlled  by  a  handful  of 
stock  that  bore  to  the  mass  a  ratio  of  less  than  one  per  cent.,  like  a  tall  pyramid 
inverted,  must  be  in  constant  danger  of  fall.  The  accumulation  of  cash  in  bank, 
I  amounting  to  three-fourths  of  a  million,  was  also  a  sore  temptation  to  schemers.  If 
to-day  one  assailant  with  honeyed  words,  but  evil  designs,  was  detected  and  repulsed, 
another  as  bad  or  worse  was  likely  to  appear  on  the  skirmish  line  to-morrow  or 
next  month. 

Both  stock  and  policy-holders  united  to  eliminate  the  peril.  Mr.  Goodman,  the 
largest  owner,  expressed  a  willingness  to  make  concessions  from  the  estimate  he 
placed  on  the  value  of  his  shares.  Others  took  similar  ground.  An  appeal  was 
made  to  the  legislature,  then  in  session,  to  furnish,  by  charter  amendments,  the 
machinery  for  extinguishing  the  stock.  That  body  promptly  passed  an  act  provid- 
ing for  the  retirement  of  the  capital  and  the  transfer  of  ownership  aud  control  to  the 
insured  when  duly.accepted  by  the  parties  in  interest. 

A  meeting  of '  policy-holders  to  be  held  on  or  before  December  3,  1889,  was 
empowered  to  purchase  all  the  capital  stock  of  the  company  at  a  price  not  exceeding 
11250  per  share,  with  interest  at  the  rate  of  five  per  cent,  from  July  ist,  to  be  paid 
out  of  the  surplus,  provided  such  price  be  first  approved  by  the  insurance  commis- 
sioner as  not  impairing  the  reserves,  and  that  no  less  than  a  majority  be  purchased  at 
any  price.  Transfers  were  to  be  made  to  the  commissioner  and  his  successors  in 
office,  in  trust  for  the  insured,  till  all  the  stock  had  been  bought,  when  the  certificates 
were  to  be  surrendered  to  the  company  for  cancellation  and  retirement.  The  existing 
directors  were  to  hold  office  and  fill  vacancies  till  the  meeting  in  December.  Mean- 
while on  the  stock  standing  in  his  name,  as  trustee,  the  commissioner  was  authorized 
to  vote  for  directors.     Great  power  and  a  wide  discretioft  were  lodged  in  his  hands. 

These  proceedings  put  an  end  to  the  schemes  of  operators  like  Mr.  McFarlane. 
On  the  /th  of  May  Mr.  Goodman  gave  to  Charles  E.  Gross,  his  assignees  and  appointees, 
an  option  for  ten  days  on  one  thousand  and  two  shares  for  ;g250,ooo,  one-halt  of  the 
sum  offered  by  the  Philadelphian.  The  offer  was  accepted  on  the  nth,  and  the  stock 
was  delivered  and  paid  for  July  3d,  a  syndicate  of  directors  and  appointees  of  Ux. 
Gross  assuming  the  load.  On  the  same  day  Mr.  Goodman  resigned  as  president  and 
director.  The  block  was  transferred  to  John  C.  Parsons  to  hold  in  trust  aud  transfer 
to  the  compau)',  provided  the  policy-holders  voted  to  buy  at  the  price  paid.  At  the 
meeting  in  December  they  so  voted  by  a  large  majority.  All  the  other  shares  except 
ten  which  remained  out  for  a  year  or  two  longer  were  taken  at  the  same  price. 
Since  then  the  company  has  been  mutual  in  methods  and  in  interests  as  in  name. 

The  meeting  also  chose  a  board  of  fifteen  directors,  who  completed  the  reorgani- 
zation by  electing  J.  B.  Bunce,  president;  John  M.  Holcombe,  vice-president,  and 
Charles  H.  Lawrence,  secretary. 

The  commissioner  demanded  repayment  of  dividends  in  excess  of  six  per  cent., 
for  the  years  1882  and  1889,  inclusive,  and  all  the  old  directors,  except  Mr.  Goodman, 
complied.     He  refused  and  was  sued,  but  the  suit  was  at  length  withdrawn. 

In  1890  John  J.  McFarlane,  having  played  leading  part  in  wrecking  the  Ameri- 
can Life  Insurance  Company  and  the  Bank  of  America,  both  of  Philadelphia,  fled  the 
7 


&8  INSURANCE   IN  CONNECTICUT. 

countn-,  while  three  confederates  in  crime  went  to  prison.  In  the  spring  of  1S93  he 
returned  from  Brazil,  surrendered  to  the  authorities  and  was  sentenced  for  four  years, 
preferring,  as  he  said,  "  punishment  in  jail  to  the  endless  miser)'  of  a  wanderer  in 
exile." 

Renewing  its  youth  the  Phoenix  Life,  under  the  new  regime^  has  advanced 
steadily  in  every  element  of  strength.  The  number  of  policies  written  increased  from 
1,224  iri  1889,  to  5,193  in  1896,  and  premium  receipts  from  ;g650,777  to  ^1,430,228. 
Although  the  cost  of  securing  new  business  makes  its  rapid  increase  a  heavy  drain 
on  resources,  the  net  surplus  grew  meantime  from  $534,000  to  $571,552,  where  we 
might  reasonably  have  looked  for  retrogression.  Belonging  now  wholly  to  the 
policy-holders,  the  company  has  taken  a  secure  j^lace  among  the  solid  institutions  of 
the  state  and  country.     Its  gross  assets  January  i,  1897,  were  $10,658,042.71. 

In  1896-7  the  company  built  a  home-office  on  the  south  side  of  Pearl  street,  near 
Main,  seventy  by  one  hundred  and  twenty  feet,  six  stories  high  in  front  and  three  in 
the  rear,  exclusive  of  the  basement.  The  floors  and  roof  are  built  after  the  new 
Columbian  svstem,  an  American  adaptation  of  the  more  clumsy  French  concrete 
method,  combining,  as  modified,  lightness,  strength  and  safety.  It  is  fire-proof 
throughout.  It  has  a  high-speed  electric  elevator,  gas  and  electric  lights,  direct  and 
indirect  steam  heat,  sanitary  plumbing,  with  abundant  ventilation  and  light  for  all 
the  rooms.     The  front  is  in  the  Italian  renaissance  style. 

For  its  own  use  the  company  occupies  the  entire  second  floor  with  the  rear  of 
the  third.  On  the  first  floor,  flanking  the  entrance  on  each  side,  are  two  large  rooms 
with  fire-proof  vaults,  suitable  for  banks.  The  rest  of  the  building  will  be  rented 
for  ofiices.  Around  the  elevator  is  a  flight  of  iron  stairs  with  platforms  and  treads 
of  Italian  marble.  The  rooms  occupied  b}-  the  company  are  finished  in  East  India 
mahogany,  and  the  rest  of  the  interior  in  oak.  There  are  nine  fire  and  burglar-proof 
vaults  constructed  with  the  most  approved  devices. 

Jonathan  B.  Bunce,  born  in  Hartford,  April  4,  1832,  passed  from  the  high  school 
of  his  native  town  to  the  Sheffield  Scientific  School  of  New  Haven,  whence  after  a 
course  of  eighteen  months,  he  moved  to  New  York  city  as  a  member  of  the  firm  of 
Dibble  &  Bunce,  commission  merchants.  In  1 860  he  was  recalled  to  Hartford  by 
the  death  of  his  father,  and  succeeded  him  in  the  wool  business,  entering  into  part- 
nership with  the  surviving  member  of  the  firm,  Drayton  Hillyer.  At  the  outbreak 
of  the  war  Gov.  Buckingham,  in  searching  for  a  suitable  person  to  reorganize  the  de- 
partment, tendered  to  Mr.  Bunce  the  position  of  quartermaster-general.  He  accepted, 
and  for  six  months  devoted  himself  untiringly  to  the  work,  equipping  for  the  field 
nine  infantry  regiments,  a  battalion  of  cavalry  and  a  battery  of  artillery.  Feeling 
that  he  could  no  longer  in  justice  to  himself  withhold  attention  from  his  own  busi- 
ness which  was  expanding  rapidly  under  the  stimulus  of  war  expenditures,  he  then 
resigned.  The  partnership  of  Hillyer  and  Bunce  continued  for  fifteen  years.  At  its 
expiration  in  1S75  he  entered  the  Phoenix  Mutual  as  vice-president,  and  at  the  reor- 
ganization in  1889  became  president.  He  is  identified  with  many  of  the  financial 
and  humane  institutions  of  the  city. 

Mr.  Holcombe  was  born  in  Hartford,  June  8,  1848,  graduated  at  the  Public  High 
School  in  1865,  and  at  Yale  University  in  1869.  While  studying  law  he  was  turned 
aside  by  fondness  for  mathematics  into  the  actuarial  department  of  the  Connecticut 
Mutual  Life,  and  in  October,  1871,  was  appointed  actuary  of  the  insurance  depart- 
ment of  Connecticut.  Of  the  Phoenix  he  became  assistant  secretary  in  1874,  secre- 
tary in  1875,  and  vice-president  in  1889. 

As  a  citizen  and  as  a  member  of  both  branches  of  the  municipal  government 


INSURANCE   IN  CONNECTICUT.  99 

Mr.  Holcombe  has  labored  indefatigably  to  improve  local  sanitary  conditions,  among 
other  things  securing  the  passage  of  an  ordinance  establishing  the  Board  of  Health, 
on  which  he  is  now  ser\-ing  as  commissioner  a  third  term.  He  is  chairman  of  the 
committee  which  laid  out  the  intercepting  sewer  lor  draining  the  Park  river  valley. 
Charles  H.  Lawrence,  secretary',  was  born  in  New  York  city,  Aug.  23,  1845. 
Passing  from  the  public  schools  to  the  then  Free  Academy,  he  came  to  Hartford  in 
1866  as  shipping  clerk  for  Smith,  Bourn  S:  Co.  He  entered  the  Phoenix  Life,  Janu- 
ary I,  1871,  and  was  chief  clerk  of  the  investment  department  at  the  time  of  reor- 
ganization in  Jtine,  1889,  w^hen  he  was  elected  secretary.  He  has  taken  deep  interest 
in  municipal  affairs,  and  in  addition  to  other  services  was  three  months  acting  mayor. 


CHAPTER    XI. 
INSURANCE  IN  CONNECTICUT— Continued. 

THE   CONTINENTAL   LIFE   INSURANCE   COMPANY,  HARTFORD. 

HARTERED  in  1862  the  Continental  was  organized  in  the  spring  of  1864, 
with  a  capital  of  ^150,000,  divided  into  six  thousand  shares  of  $25  each. 
In  July,  1866,  the  capital  was  increased  to  ;^300,ooo.  Forty  per  cent,  was 
paid  in  cash,  and  sixty  per  cent,  was  represented  by  stock  notes.  May  16, 
1864,  was  elected  the  first  board  of  directors,  consisting  of  John  S.  Rice, 
Lucius  J.  Hendee,  James  L-  Chapman,  Samuel  E.  Elmore,  Horace  Cornwall,  Buel 
Sedgwick  and  Ezra  Hall.  Three  months  later  Allyn  S.  Stillman,  H.  K.  W.  Welch 
and  Abner  Church  were  added.  The  original  seven  met  May  23d  and  elected  John 
S.  Rice,  of  Farmington,  president,  and  Samuel  E.  Elmore,  secretary-. 

It  was  a  period  prolific  in  the  birth  of  life  insurance  companies.  In  New  York, 
under  a  general  statute,  many  sprang  into  being  about  this  time.  After  struggles 
variously  jirolonged  most  of  them  passed  away.  Meanwhile  intensity  of  competition 
enhanced  expenses  and  diminished  profits. 

At  the  annual  meeting  in  1 870  a  plan  to  capture  the  management  took  form. 
Several  of  the  old  directors  were  displaced.  James  S.  Parsons,  as  representative  of 
the  assailants,  was  elected  vice-president,  with  the  duties  ordinarily  assigned  to  the 
superintendent  of  agencies.  Mr.  Elmore  succeeded  Mr.  Rice  in  the  presidency. 
Francis  D.  Douglass,  assistant  secretary  since  July  i,  1869,  was  made  secretary. 

At  the  next  annual  meeting  the  intrusive  element  dropped  out.  Lucius  J. 
Hendee,  was  elected  vice-president,  and  the  by-law  attaching  certain  duties  to  the 
office  was  rescinded.  May  ist  Mr.  Hendee  retired,  and  John  S.  Rice  was  elected  in 
his  place,  watli  the  special  assignment  of  examining  all  claims  for  losses. 

At  the  annual  meeting  in  March,  1873,  the  assault,  partially  successful  in  '70, 
but  foiled  in  '71,  carried  the  position.  The  new  directors  were:  John  C  Tracy, 
Edwin  Bulkeley,  George  C.  Johnson,  Ansel  Arnold,  Thomas  Ramsdell,  John  S.  Wells, 
J.  G.  Martin,  James  S.  Parsons,  H.  B.  Freeman  and  Robert  E.  Beecher.  One-half  of 
the  new  board  resided  in  the  town  of  Windham.  They  elected  James  S.  Parsons 
president,  and  Robert  E.  Beecher  secretary. 

Januan,-  i,  1873,  the  statement  claimed  assets  of  §2,735,394  (of  which  $1,330,315 
were  in  premium  notes),  and  a  surplus  over  all  liabilities  of  $355,357- 

In  the  statement  for  December  31,  1874,  the  capital  is  first  reported  as  full-paid. 


100  INSURANCE   IN  CONNECTICUT. 

It  was  done  thus.  John  C.  Trac}-,  a  director  in  the  Continental,  was  also  president 
of  the  Farmers'  and  Mechanics'  Bank.  For  friends  he  did  illegal  acts  which  in  the 
end  brought  heavy  losses  upon  the  bank  and  punishment  upon  himself  December 
31st,  a  package  of  stock  notes  having  a  face  value  of  ^180,000  was  deposited  in  the 
bank,  and  a  credit  for  the  same  amount  entered  on  the  pass-book  of  the  Continental. 
January  19th  the  package  was  withdrawn,  and  the  credit  cancelled. 

As  more  fully  described  in  the  historj'  of  the  Charter  Oak  a  special  commission 
was  appointed  in  1877  to  investigate  the  life  companies  of  Connecticut.  Judge 
Origen  S.  Seymour,  chairman,  examined  the  home  affairs  of  the  Continental,  taking 
as  a  point  of  departure  the  annual  statement  to  the  commissioner,  dated  December 
31,  1876.  The  return  and  the  books  of  the  company  were  found  to  correspond. 
Still,  strange  outcroppings  perplexed  the  mind  of  the  Judge  and  led  him  to  probe 
deeper.  At  first  the  dance  of  ghostly  figures  without  substance  grievously  bewildered 
him.     Weeks  of  hard  labor  passed  before  the  real  situation  took  form  in  his  mind. 

After  the  revolution  of  1873,  the  new  management,  to  entrench  itself  more 
securely,  bought  with  the  funds  of  the  company  from  hostile  interests  4670  shares  of 
its  own  stock  at  a  cost  of  1^125,482.90,  or  $5,482.90  more  than  all  the  cash  paid  into 
the  treasury  on  capital  account.  The  block  stood  December  31,  1876,  in  the  name 
of  John  C.  Trac)',  trustee,  by  whom  as  trustee  also  the  accompanying  stock  note  of 
;g70,05o  was  signed.  It  is  apparent  that  the  money  thus  paid  out  and  the  note  given 
to  itself  had  no  value  whatever  as  security  for  creditors. 

Various  large  sums  were  credited  by  President  Tracy  on  the  pass-book  of  the 
Continental  which  were  nowhere  to  be  found  in  the  accounts  of  the  bank.  The 
first  was  an  item  of  ^186,907. 16,  which  represented  to  the  extent  of  $180,000  the 
stock-notes,  including  the  one  for  $70,000  virtually  given  through  its  trustee  by  the 
company  to  itself  From  time  to  time  the  Continental  had  advanced  $133,534.90  to 
Sharps'  Rifle  Company.  The  vouchers  were  handed  to  Mr.  Tracy,  and  he  entered  on 
the  pass-book  a  credit  for  the  same  amount.  His  act  was  wholly  illegitimate. 
Whether  the  property  was  worth  more  or  less  than  the  face  of  the  vouchers  would 
depend  of  course  upon  the  outcome  of  the  venture.  The  $125,482.90  paid  out  for 
its  own  stock  appeared  in  two  items,  one  of  $20,966.40,  credited  on  the  pass-book, 
and  the  other  in  a  certificate  of  special  deposit  for  $104,516.50.  The  latter  went 
toward  making  up  the  sum  reported  as  cash  deposited  in  bank.  There  was  still 
another  credit  of  $35,000  which  represented  not  even  the  shadow  of  a  shadow. 
Against  this  aggregate  of  $480,924.90,  but  two  offsets  can  be  allowed  ;  the  notes  for 
sixty  per  cent,  on  the  7330  shares  in  the  hands  of  the  public  ($109,950)  and  the 
equity  in  Sharps'  Rifle  Company. 

United  States  bonds,  par  $205,000,  market  value  $230,625,  and  Windham  town 
bonds,  $35,000,  were  included  in  the  same  return  among  the  assets  owned  by  the 
company  December  31st.  It  is  true  that  December  27th  the  president  of  the  Conti- 
nental wrote  to  the  bank  requesting  it  to  buy  on  account  of  tlie  company  $200,000 
United  States  bonds.  From  the  5  th  to  the  loth  of  January  inclusive  the  bank  made 
the  purchases  on  the  general  credit  of  the  company,  using  its  own  funds  for  the  pur- 
pose, holding  the  bonds  as  security  with  power  of  attorney  to  sell,  and  again  disposed 
of  them  all  between  February  loth  and  March  2,  1S77,  repaying  itself  with  the 
proceeds.  Yet  to  keep  up  the  show  the  insurance  company  as  if  in  paj'ment  drew 
checks  upon  the  unreal  credits  entered  on  the  pass-book,  but  not  on  the  bank  ledger. 
The  ownership  of  the  Windham  bonds  seems  if  possible  even  more  mythical.  Mr. 
Tracy  left  the  bank  in  February,  1877.  ^^  the  adjustment  that  followed,  the 
spectral  assets,  evoked  from  the  realm  of  sliadows  by  his  aid,  returned  to  the  noth- 
ingness whence  they  seemed  to  spring. 


INSURANCE   IN  CONNECTICUT.  101 

The  special  commission  submitted  its  report  to  the  General  Assembly  January  1 5, 
1 878,  but  no  adverse  action  was  taken.  Commissioner  Stedman  required  the  com- 
pany to  restore  the  money  used  in  the  purchase  of  its  own  shares.  Thereupon  the 
officers  represented  to  certain  stockholders  that  on  account  of  the  disturbance 
created  by  the  special  commission  there  was  need  of  a  temporary  increase  of  assets. 
Supposing  that  the  emergency  would  soon  be  passed,  the  parties  appealed  to  gave 
their  notes,  with  collaterals,  for  sums  that  amounted  altogether  to  $125,482.90. 
No  interest  was  collected  from  the  makers,  and  all  dividends  on  the  securities 
entrusted  to  the  officers  were  paid  over  to  the  actual  owners. 

In  the  summer  of  1887,  a  local  firm  of  brokers,  with  which  the  president  of  the 
Continental  had  had  extensive  dealings,  failed.  Within  a  few  days  the  affairs  of  the 
concern  were  published  in  detail.  Among  the  securities  hypothecated  to  the  firm  to 
reinforce  speculative  margins,  and  in  several  cases  rehypothecated  elsewhere,  the 
parties,  who  had  filled  the  gap  of  §125,000,  recognized  some  of  their  own  stocks. 
Others  had  vanished.  Stocks  and  bonds,  once  the  property  of  the  Continental,  and 
supposed  by  the  directors  to  be  securely  stored  in  the  vaults  of  the  company,  turned 
up  to  their  surprise  in  the  same  place. 

Commissioner  Fyler  at  once  began  an  examination,  taking  as  a  basis  the  state- 
ment for  December  31,  1886.  By  the  17th  of  November  he  had  progressed  so  far  as 
to  feel  called  upon  to  issue  an  order,  under  the  statute,  forbidding  the  issue  of  new 
policies  and  the  payment  of  dividends.  After  further  progress  he  became  satisfied 
that  the  impairment  exceeded  twenty-five  per  cent,  of  the  assets,  and  on  the  30th  of 
November  applied  to  Judge  Carpenter,  of  the  Supreme  Court  of  Errors,  for  the 
annulment  of  the  charter,  and  the  appointment  of  a  receiver.  The  application  was 
resisted,  and  the  case  adjourned  till  December  23.  At  the  second  hearing,  the  peti- 
tion was  not  opposed,  and  the  Court  appointed  Eorrin  A.  Cooke  and  John  R.  Buck 
receivers. 

Under  the  scnitiny  of  the  commissioner,  the  volume  of  admitted  assets  shrank 
from  $2,113,356.68  to  $1,235,680.97,  including  $391,064  in  premium  notes.  He 
placed  the  direct  liabilities  at  $2,070,045.25. 

Before  the  second  hearing  the  president  liad  retired  beyond  the  jurisdiction  of 
the  Court.  The  secretary  was  indicted  for  perjury,  in  swearing  to  a  false  return.  It 
was  claimed  on  his  side  that  he  had  never  made  oath  to  the  return,  and  that  the 
certificate  of  the  notary  was  false.  Under  a  New  York  decision  in  a  similar  case,  that 
"there  must  be  proof  of  the  oath  taken,  independent  of  the  notarj-'s  certificate,  signa- 
ture, seal  and  jurat,"  the  judge  advised  that  the  case  be  nolled. 

THE  CONNECTICUT  GENERAL  LIFE  INSURANCE  COMPANY. 
The  Connecticut  General  entered  a  field  already  crowded,  not  as  a  competitor  of 
older  institutions,  but  with  the  view  of  selecting  at  adequate  rates,  from  risks  which 
others  rejected.  Dr.  Phelps,  father  of  the  Connecticut  Mutual,  was  also  the  god- 
father of  the  Connecticut  General,  and  proposed  to  further  aid  the  infant  enterprise 
with  liberal  slices  from  the  excess  lines  of  the  parent  company.  The  promoters 
reasoned,  quite  plausibly,  that  if  fire  rates  could  be  so  adjusted  upon  all  classes  of 
property  as  to  be  remunerative,  there  could  be  no  inherent  difficulty  in  graduating 
the  cost  of  insurance  for  impaired  lives  also.  It  was  soon  found,  however,  that  the 
infirmities  buried  in  the  human  system  were  too  deceptive  and  variable  to  respond  to 
any  determinate  law  of  averages.  Moreover,  applicants  who  failed  to  pass  the  stand- 
ard examinations,  did  not  display  expected  alacrity  in  accepting  the  benefits  of  the 
new  departure  on  the  terms  proposed.     Each  one's  confidence  in  his  own  destiny  is 


102  INSURANCE   IN   CONNECTICUT, 

so  strong  that  he  must  either  suffer  from  "malaria,"  or  be  clearly  nearing  the  grave, 
before  he  will  admit  that  his  chances  of  longevity  are  less  than  those  of  his  neigh- 
bor. Happily  the  error  in  the  theory  was  soon  shown  by  the  perplexities  encoun- 
tered in  attempts  to  apply  it,  and  in  two  years  the  feature  was  abandoned,  and  the 
business  of  the  company  thenceforth  confined  to  first-class  risks. 

It  is  worthy  of  note  that  the  Universal  and  the  American  Popular  Life  Insurance 
Companies,  organized  about  the  same  time  on  the  same  theory,  persisted  in  adhering 
to  the  plan,  and  paid  the  penalty  a  few  years  later  by  dying  bravely  in  the  last  ditch. 

In  view  of  the  extra  hazards  and  untried  conditions  to  be  met,  the  capital  was 
placed  by  the  charter  at  not  less  than  $500,000.  Ten  per  cent,  was  required  at  the 
time  of  subscription,  a  second  installment  of  10  per  cent,  was  called  at  the  first 
meeting  of  directors,  and  a  third,  of  30  per  cent,  in  cash,  June  9,  1866.  When  the 
experiment  of  insuring  impaired  lives  was  given  np,  the  need  of  a  large  capital  to 
guarantee  the  performance  of  contracts  also  vanished.  Hence,  by  permission  of  the 
Legislature,  it  was  reduced  in  1874  to  ^250,000,  the  amount  actually  paid  in.  The 
reduction  was  effected  by  the  cancellation  of  stock  notes.  In  1880  it  was  again  cut 
down  to  $150,000,  by  taking  up  two-fifths  at  par,  the  growing  strength  of  the  insti- 
tution having  rendered  a  larger  guaranty  needless.  This  was  the  first  life  insurance 
company  in  Connecticut  of  which  the  capital  was  wholly  paid  in  cash. 

The  first  board  of  eighteen  directors,  twelve  from  Hartford  and  six  from  other 
cities,  was  elected  July  20,  1865.  A  week  later  John  M.  Niles  was  elected  presi- 
dent ;  Edward  W.  Parsons,  vice-president,  and  Thomas  W.  Russell,  secretary.  Mr. 
Niles  held  the  place-  but  a  few  weeks,  having  been  succeeded  by  Mr.  Parsons  in 
September. 

With  others  the  Connecticut  General  suffered  from  the  shrinkage  of  values  that 
followed  the  panic  of  1873.  Loans  made  on  real  estate  at  inflated  values  defaulted, 
throwing  upon  its  hands  large  blocks  in  several  cities,  notably  in  Washington,  D.  C. 
The  distress  to  all  interests  was  severest  during  the  winter  of  1876-7.  The  annual 
statement  for  December,  1S76,  showed  an  impairment  of  capital  on  a  four  per  cent, 
basis  of  $12,607.67,  or,  throwing  out  items  not  admitted  by  the  commissioner,  of 
$18,265.41.  Total  assets  then  amounted  to  $1,272,298.  But  the  turning  point  had 
been  reached.  From  that  date  onward  the  company  has  steadily  gained  in  every 
element  of  strength,  though  compelled  from  time  to  time  to  charge  off  losses  arising 
from  the  old  transactions  above  referred  to. 

In  May,  1 876,  Thomas  W.  Russell,  an  expert  in  life  insurance,  succeeded  Mr. 
Parsons  as  president,  and  at  the  same  time  Frederick  V.  Hudson  was  elected 
secretary. 

In  1872  the  company  began  to  issue  policies  on  the  tontine  plan  in  a  modified 
form  for  terms  of  ten  and  twenty  )-ears.  In  July,  1887,  the  scheme  was  abandoned 
in  disgust,  partly  from  conviction  that  the  theory  was  injurious  and  misleading,  and 
partly  from  the  incessant  complaints  of  the  unfortunates  who  fell  by  the  wayside. 
It  seemed  impossible  to  print  conditions  in  type  sufficiently  conspicuous  to  attract 
the  attention  of  the  insured  to  the  terms  of  the  contract.  On  the  other  hand,  those 
who  have  held  out  to  the  end  have  had  no  ground  for  fault-finding.  The  funds  be- 
longing to  separate  classes  have  been  kept  distinct,  and  have  been  charged  only  with 
their  proportionate  share  of  expenses.  On  long-term  policies  the  company  is  paying 
fifty-nine  per  cent,  of  estimated  results,  and  on  short  term,  eighty-eight,  as  the  latter 
are  less  affected  by  the  continuous  fall  in  rates  of  interest,  which  dropped  fully  one- 
third  during  the  progress  of  the  experiment.  These  results  are  from  fifty  to  over 
one  hundred  per  cent,  better  than  results  attained  by  some  of  the  largest  companies 


INSURANCE   IX  CONNECTICUT.  103 

in  the  country,  which  about  the  same  time  went  into  the  scheme  on  a  grand  scale 
with  promises  as  alluring  as  experts  in  the  manufacture  of  advertising  literature 
could  produce. 

May  22,  1894,  President  Russell  reached  the  age  of  three-score  years  and  ten. 
From  the  young  men  in  the  office,  whose  welfare  he  has  studied  with  the  solicitude 
of  a  father,  came  the  suggestion  that  the  company  take  some  appropriate  notice  of  the 
event.  The  idea  was  approved  by  the  directors.  At  a  complimentary-  dinner  given 
on  the  29th  of  June,  officers,  directors,  employees  and  general  agents,  with  a  few 
invited  guests,  came  together  to  express  their  regard  for  one  who  had  served  the 
institution  continuously  from  its  birth.  Three  others  were  present  who  had  also 
been  connected  with  it  from  the  beginning  :  Doctor  Melanchthon  Storrs,  vice-presi- 
dent, toastmaster  and  medical  examiner  ;  Leverett  Brainard,  mayor  of  the  citv  at  the 
time,  and  a  continuous  director ;  and  Walter  H.  Tilden,  agent  at  Philadelphia,  and 
an  original  stockholder. 

Mr.  Russell  was  born  at  Greenfield,  ^Nlass.  From  1846  till  1852  he  was  a  mer- 
chant at  Mystic  Bridge,  Conn.,  and  incidentally  acted  as  local  agent  for  the  Charter 
Oak  Life  Insurance  Company,  which  in  the  latter  }'ear,  when  he  represented  the  town 
of  Stonington  in  the  General  Assembly,  persuaded  him  to  move  to  Hartford  and 
take  a  traveling  agency.  In  1857  he  was  elected  vice-president.  He  resigned  in 
1864,  while  its  sky  was  still  unclouded,  and  after  a  year  with  the  Connecticut 
Mutual,  aided  in  launching  the  company  to  which  he  has  devoted  the  energies  of 
three-fifths  of  his  business  life.  Since  his  accession  to  the  presidency  it  has  enjoyed 
not  only  uninterrupted,  but  in  regard  to  solidity,  conspicuous  prosperit}-.  Others 
have  grown  faster  in  accumulations,  but  few  now  surpass  it  in  strength. 

January  i,  1897,  the  comjiany  had  gross  assets  amounting  to  ^2,944,747.97,  with 
a  net  surplus  of  ^388,862.35  exclusive  of  its  capital  of  $150,000.  Of  the  surplus, 
too,  $260,058  belongs  to  a  special  class  of  policies.  There  have  been  few  changes  in 
the  official  corps. 

Frederick  V.  Hudson,  secretary,  was  born  in  February,  1838,  in  Cincinnati,  O., 
where,  in  1867,  he  became  local  agent  for  the  Penn  Mutual,  and  the  next  year  state 
agent  for  the  Hartford  Life  and  Annuity.  After  a  short  term  he  accepted  the  general 
agency  of  the  Connecticut  General  in  October,  1 868,  and  was  elected  secretary  in  1 876. 

Edward  B.  Peck,  assistant  secretary,  was  born  in  Galveston,  Tex.,  January  31, 
1840 ;  was  educated  in  the  schools  of  St.  Louis,  Mo.,  taught  several  years,  a  part  of  the 
time  as  principal  of  one  of  the  public  schools  of  Bridgeport,  Conn.,  engaged  in  mercan- 
tile business  in  Alabama,  whence  he  moved  to  Hartford,  where  he  was  made  cashier 
and  accountant  of  the  Connecticut  General  in  Max,  1868,  and  assistant  secretarv  in 
May,  1882. 

Robert  Watkinson  Huntington,  actuary,  was  born  in  Norwich,  Conn.,  November 
9,  1866  ;  graduated  at  the  Hartford  High  School  in  1885,  at  Yale  University  in  1889, 
and  in  November  of  the  same  year  entered  the  office  of  the  Connecticut  General,  of 
which  he  was  appointed  actuary  June  29,  1893. 

THE  HARTFORD  LIFE  AND  ANNUITY  INSURANCE  COMPANY. 
This  company  was  chartered  in  1866  as  the  Hartford  Accident  Insurance  Com- 
pany, primarily  to  make  insurance  connected  with  loss  of  life  or  personal  injur)' 
through  accidents  of  every  description,  and  with  the  privilege  also  of  making  ordi- 
nary insurance  upon  lives.  August  14th,  of  the  same  year,  the  subscribers  chose  the 
following  directors,  viz. :  Daniel  F.  Seymour,  Jasper  H.  Bolton,  Stiles  D.  Sperr>-,  E. 
Thomas  Lobdell,  John  A.  Butler,  Alvan  P.  Hyde,  Chester  Adams,  John  W.  Danforth, 


104  INSURANCE   IN   CONNECTICUT. 

Elislia  P.  Smith,  Jacob  Knous,  Hiram  Bissell,  Thomas  J.  Vail,  Joshua  R.  Lord,  John 
B.  Russell  and  David  A.  Rood. 

T.J.  Vail  was  elected  president;  C.  C.  Kimball,  vice-president;  and  September 
1 0th,  W.  S.  Manning,  secretar>'.     The  capital  was  placed  at  ;g300,ooo. 

Little  was  then  known  about  accident  insurance,  and  the  unprofitableness  of  the 
attempt  soon  became  apj^arent.  In  1867  the  name  was  changed  to  the  Hartford  Life 
and  Accident  Insurance  Company,  and  in  1868  the  descriptive  words  were  changed 
to  the  Hartford  Life  and  Annuity. 

For  the  first  two  years  money  was  lost  rapidly.  Changes  now  occurred  in  both 
pcrsonttel  auA  policy.  The  accident  business  was  dropped.  In  May,  1868,  Chester 
Adams  consented  to  act  as  president  pro  tcftt.  till  a  suitable  person  could  be  found. 
After  much  importunity  C.  C.  Kimball  took  the  position  in  January,  1869.  With  a 
keen  sense  of  the  needs  of  the  situation  he  cut  off  excrescenses,  reformed  old  methods 
and  soon  put  the  concern  on  a  money-making  basis.  James  P.  Taylor,  later  cashier 
and  president  of  the  Charter  Oak  Bank,  served  as  secretary' from  May,  1867,  till  May, 
1874. 

With  the  improved  outlook  certain  parties  in  the  directory  were  seized  by  a  sud- 
den and  singular  desire  to  obtain  control  for  the  sake  of  the  supposed  honors  aud 
emoluments.  No  resistance  was  offered  from  within.  On  the  contrary,  a  large  block 
of  stock  was  indirectly  and  kindly  supplied  to  them  at  high  prices.  At  the  next 
annual  election  in  May,  1 870,  Warehani  Griswold  was  chosen  president,  and  D.  F. 
Seymour,  who  had  been  vice-president  since  February  8,  1869,  became  the  active 
manager. 

Affairs  now  took  another  turn.  Expenses  grew,  and  business  became  unprofit- 
ble.  The  book  value  of  the  shares  fell  from  eighty-eight  in  the  spring  of  1S70,  to 
fifty-five  within  the  next  five  years.  Mr.  Griswold  died  in  1876,  and  was  succeeded 
by  E.  H.  Crosby.  Stephen  Ball,  who  was  elected  assistant  secretary  October  28,  1867, 
and  secretary  May  12,  1874,  saw  that  a  change  of  method  was  imperative.  Under  his 
guidance  new  business  was  dropped,  collections  were  made  from  the  home  office,  and 
rigid  economy  was  enforced.  Meanwhile  every  proper  claim  was  fully  and  promptly 
met.  So  great  are  the  recuperative  energies  of  life  insurance  that  in  a  few  years  the 
technical  solvency  and  general  credit  of  the  company  were  fully  restored,  the  capital 
having  been  reduced  meanwhile  to  $250,000.  It  was  now  ready  to  re-enter  the  field 
aggressively. 

In  January,  1880,  the  company  adopted  a  form  of  natural  premium  insurance 
combining  low  cost  aud  security,  devised  by  Henry  P.  Duclos,  formerly  of  St.  Albans, 
Vt.  At  the  same  time  a  contract  was  made  with  Duclos  and  his  associate,  A. 
T.  Smith,  to  manage  the  agency  department.  Tlie  system  requires  policy-holders 
to  pay  only  for  the  actual  mortality  among  members  as  it  occurs,  in  quarterly  periods. 
Applicants  for  insurance  pay  a  single  admission  fee,  which  varies  according  to  tlie 
amount  required,  but  not  with  the  age  of  the  person.  For  collecting  and  distributing 
the  funds  and  all  other  expenses  of  management,  a  yearly  charge  of  $3.00  per  g  1,000 
of  insurance  is  made,  and  the  rate  cannot  be  increased.  The  safety  fund,  which  gives 
the  system  its  name,  is  made  up  exclusively  of  contributions  of  $10.00  per  $1,000, 
required  of  each  member  once  only,  and  placed  in  the  hands  of  the  Security  Company 
of  Hartford  as  trustee  for  the  policy-holders.  In  July,  1894,  it  reached  the  contract 
limit  of  one  million  of  dollars.  Till  then  semi-annually  the  entire  net  income  from 
the  fund  was  divided  pro  rata  among  the  holders  of  certificates  in  force,  who,  five 
years  before  or  earlier,  contributed  to  it  their  full  share,  and  the  dividends  thus 
accruing  were  applied  to  the  reduction  of  subsequent  dues  and  mortality-calls.     Since 


INSURANCE  IN   CONNECTICUT.  105 

that  date  the  contributions  from  new  members  are  semi-annually  added  to  the  income 
from  it,  when  the  entire  surplus  thus  accruing  is  distributed  in  like  manner. 

The  principal,  placed  by  a  deed  of  trust  beyond  the  control  of  the  company, 
remains  at  an  even  million,  as  a  guaranty  that  death  claims  shall  always  be  met  in 
full,  even  if  the  membership  for  any  cause  be  so  reduced  that  stipulated  mortality- 
calls  fail  to  produce  enough  to  satisfy  the  claims. 

By  mathematical  computation  the  rates  are  so  fixed  that  the  amount  of  insurance 
in  force  must  fall  below  one  million  dollars  to  cause  an  insufficient  membership. 
Should  such  contingency  occur,  the  trustee  is  required,  from  the  principal  of  the 
safety  fund,  to  pay  all  outstanding  policies  in  full,  without  waiting  for  death  to  mature 
the  claims.  Had  the  condition  arisen  in  the  early  stages  of  the  venture,  and  before 
accumulations  were  sufficient  to  meet  all  liabilities  in  full,  the  deed  j^rovided  for  the 
division  of  the  fund  pro  rata  among  the  holders  of  certificates  in  force.  This  was  the 
first  company  in  the  country  doing  business  on  the  assessment  plan,  where  an  ample 
fund  was  built  up  to  protect  the  insured  against  adverse  possibilities,  liable  to  occur 
in  the  distant  future. 

Several  modifications  of  the  original  plan  have  been  adopted,  but  none  which 
alter  its  essential  character.  ]\Ir.  Duclos  died  in  March,  1885.  Mr.  Smith  continued 
to  manage  the  agency  department  till  his  resignation  in  September,  1896,  when  he 
was  succeeded  by  W.  B.  Warner,  who  had  been  in  the  service  of  the  company  four- 
teen years,  and  assistant  superintendent  of  agencies,  ten. 

Since  1880  the  business  of  the  company  has  been  confined  to  the  "safety 
fund  plan." 

Late  presidents  have  been  E.  H.  Crosby,  May,  1876-1882;  Frederick  R. 
Foster,  May,  1882-1889 ;  H.  A.  Whitman,  May,  1889- 1893  ;  R.  B.  Parker,  since  1893. 

Januarj' I,  1897,  assets  were, J2, 465, 152.65 

Liabilities, 1,893,922.34 

Number  of  policy-holders 44.297 

Rienzi  B.  Parker,  president,  was  born  in  South  Coventry',  Conn.,  February  15, 
1838.  Soon  after  leaving  the  High  School  in  Ellington,  he  engaged  in  the  manu- 
facture of  cotton  goods,  an  industry  in  which  his  father  had  long  experience.  In 
1873  he  established  the  Ravine  I\iills  Company,  at  Vernon,  Conn.,  and  is  still  its 
treasurer.  A  stockholder  in  the  Hartford  Life  and  Annuity  from  the  first,  he  was 
elected  president  in  May,  1893. 

Stephen  Ball,  secretar>',  was  born  in  1839,  in  New  Haven,  Conn.  He  came  to 
Hartford  in  1867,  from  New  Orleans,  where  he  had  been  employed  in  the  service  of 
the  government.  In  August  of  the  same  year  he  was  made  assistant  secretary  of  this 
company,  and  in  1874,  secretary.  He  was  largely  instrumental  in  rescuing  the 
institution  from  its  early  dangers  and  in  building  it  up  afterwards. 

W.  A.  Cowles,  an  employee  of  the  company  since  May,  1872,  was  elected  assis- 
tant secretary.  May  13,  1874. 

After  plans  prepared  by  Frederick  R.  Comstock,  at  the  corner  of  Asylum  and 
Ann  streets,  in  1897,  the  company  will  complete,  mainly  for  its  own  use,  a  building 
of  five  stories,  with  a  frontage  of  sixty-two  and  a  depth  of  one  hundred  and  two  feet. 
The  style  is  a  modification  of  the  Italian  renaissance.  The  first  story  of  the  exterior 
has  a  base  course  five  feet  high,  of  granite  with  a  hammered  dress  face,  surmounted 
by  Indiana  limestone  laid  in  courses.  This  is  crowned  by  a  continuous  and  highly- 
ornamented  cornice  of  terra-cotta,  slightly  lighter  in  color  than  the  limestone.  The 
stories  above  are  laid  in  buff-colored  press-brick  and  cream-colored  terra-cotta.     The 


106  INSURANCE   IN   CONNECTICUT. 

entire  superstructure  is  supported  by  steel  columus  and  steel  beams  encased  in  solid 
walls  of  brick.  On  the  level  with  Asylum  street  are  two  stores,  with  the  printing 
department  of  the  company  in  the  rear,  opening  into  Ann.  The  second  and 
third  floors  are  occupied  wholly  by  offices  of  the  company.  Each  has  a  fireproof 
vault,  eight  and  one-half  by  eighteen  feet.  The  fourth  and  fifth  floors  will  be  leased 
till  the  room  is  required  by  the  owners.  Hot  water  is  used  for  heating,  and  electricity 
for  light.  Much  attention  has  been  given  to  ornamentation  both  on  the  exterior 
and  interior. 


CHAPTER     XII. 
INSURANCE  IN  CONNECTICUT— Contlnufd. 

MISCELLANEOUS   INSURANCE. 

•^^SIDE  from  marine,  fire  and  life  insurance,  attempts  have  been  made  in  Con- 
necticut from  time  to  time  to  extend  the  business  to  various  other  classes 
of  risks.  Several  health  companies  were  chartered  about  the  middle  of 
the  century',  and  the  reason  of  their  failure  is  given  in  our  account  of  the 
Connecticut  Health.  A  little  later  the  notion  became  suddenh'  prevalent 
that  money  could  be  made  by  insuring  live  stock.  A  few  experiments  proved  the 
futility  of  the  scheme.  Somehow  the  cow  or  the  ox  that  died  belonged  to  the  part 
of  the  herd  that  happened  to  be  covered  by  the  policy.  The  question  of  identity 
often  arose  to  the  bewilderment  of  agents,  if  not  of  owners.  It  was  soon  discovered,  too, 
that  less  care  was  taken  of  horses  when  heavily  insured.  On  our  canals  and  in  other 
pursuits  where  consumption  was  rapid,  the  records  showed  the  exact  ratio  of  loss  so 
that  managers  took  out  policies  only  when  sure  of  saving  money  by  the  operation. 

Two  institutions  in  Connecticut,  each  entering  as  a  pioneer  a  field  not  previously 
trodden  in  America,  have  won  eminent  success. 

THE  TRAVELERS  INSURANCE  COMPANY. 

In  1863,  when  passing  through  England,  James  G.  Batterson,  of  Hartford,  became 
interested  in  the  subject  of  casualty  insurance,  and  after  examining  the  methods  pur- 
sued there  and  on  the  Continent,  was  convinced  that  the  system  could  be  advan- 
tageously transplanted  into  the  United  States.  On  his  return  home  the  scheme  was 
talked  over  with  influential  friends,  but  at  first  met  with  little  encouragement  or 
sympathy.  However,  the  jDersonal  force  of  the  projector,  backed  by  arguments  which 
grew  in  number  and  cogency  as  the  discussion  went  on,  began  to  win  valuable  con- 
verts, and  the  enterprise  soon  materialized  in  tangible  form.  Outside  of  the  charmed 
circle  skepticism  still  prevailed,  but  a  nucleus  had  been  formed  and  a  charter  was 
secured  in  June,  1863. 

By  the  terms  of  the  charter  the  capital  was  placed  at  not  less  than  $100,000,  with 
the  right  to  increase  it  at  will  to  any  sum  not  exceeding  $250,000.  An  installment 
often  per  cent,  was  required  at  the  time  of  subscription,  a  second  installment  of  like 
amount  within  sixty  days  after  organization,  and  the  remaining  eighty  within  the 
same  period  in  stock  notes  properly  secured  and  payable  at  the  call  of  the  directors. 

At  first  the  business  of  the  incorporation  was  limited  to  "  the  insuring  of  persons 
against  the  accidental  loss  of  life  or  personal  injury  sustained  while  traveling  by  rail- 


INSURANCE   IN   CONNECTICUT.  107 

ways,  steamers,  or  other  modes  of  conveyance  in  the  United  States  and  other  coun- 
tries." 

At  the  City  Bank  of  Hartford,  a  book  for  subscriptions  was  opened  by  the  com- 
missioners, James  G.  Batterson,  George  M.  Bartholomew,  Gustavns  F.  Davis  and 
William  h.  Collins,  January  28,  1864,  when  two  thousand  shares  of  ;giooeacli  were 
taken  and  the  first  installment  paid.  The  first  meeting  of  stockholders,  held  at  the 
same  place  February  23,  voted  to  issue  the  remaining  fifty  thousand  dollars  of  capital 
stock,  and  elected  the  following  directors  :  James  G.  Batterson,  Ebenezer  Roberts, 
W.  H.  D.  Callender,  Thomas  Belknap,  Jr.,  James  L.  Howard,  Charles  White,  George 
W.  Moore,  Cornelius  B.  Erwin,  Marshall  Jewell,  Hugh  Harbison,  G.  F.  Davis, 
George  S.  Gilnian,  and  Jonathan  B.  Bunce.  The  next  day  the  board  elected  James 
G.  Batterson  president.  IMarch  4th  G.  F.  Davis  was  elected  vice-president,  and  Rod- 
ney Dennis  secretary. 

Finding  the  powers  first  granted  too  narrow,  the  managers  b)'  an  amendment  to 
the  charter  one  year  later  obtained  authority  "  to  make  all  and  every  insurance  con- 
nected with  accidental  loss  of  life  or  personal  injury  sustained  by  accident  of  every 
description." 

To  the  substantial  nucleus  of  president  and  secretary  were  added  in  time  several 
other  young  men  who  manifested  capacity  for  the  assimilation  and  mastery  of  com- 
plex details,  and  the  gifts  of  all  were  put  to  a  severe  test  in  the  early  struggles  of  the 
company  for  existence.  Severe  labor,  rigid  economy,  and  especially  quickness  and 
accuracy  in  the  interpretation  of  facts,  carried  the  enterprise  safely  through  the  perils 
of  infancy.  Not  a  penny  was  wasted  on  superfluities.  The  first  office,  located  on 
the  second  floor  to  save  rent,  was  furnished  with  two  chairs  and  a  second-hand  pine 
desk  set  on  a  cheap  table.  A  carpet  was  an  extravagance  not  to  be  thought  of.  For 
a  while  the  officers  did  all  the  work  alone,  writing  the  letters,  keeping  the  books,  in- 
structing agents  in  the  mysteries  of  the  craft,  and  running  on  errands  for  exercise. 
The  first  luxury  to  be  introduced  was  an  office-boy,  who  became  assistant  secretary'. 

For  eight  generations  children  have  read  with  unabated  interest  of  the  pilgrim- 
age of  Hooker  and  his  flock  through  the  trackless  forest,  from  Massachusetts  Bay  to 
the  banks  of  the  Connecticut,  with  only  the  compass  and  north  star  for  guides. 
On  starting  into  the  wilderness  the  Travelers  had  the  benefit  of  neither  compass  nor 
star.  At  home  no  one  had  gone  before  to  cut  a  bush  or  blaze  a  tree  ;  while  the  con- 
ditions underlying  the  casualty  business  in  England  differed  so  widely  from  those  in 
America  that  the  scanty  generalizations  formulated  in  tables  by  the  pattern-company 
proved  treacherous  and  misleading.  From  the  bottom  stone  in  the  foundation  to  the 
flagstaff"  on  the  tower,  the  officers  constructed  as  they  went,  without  aid  from  archi- 
tectural designs  or  preformed  plans,  necessarily  making  many  mistakes,  and  costly 
mistakes  too — tearing  down,  changing,  rebuilding,  adding  here  and  discarding  there 
— till  from  a  chaos  of  materials  grew  the  present  solid,  stately,  and  enduring  edi- 
fice, the  despair  of  rivals,  and  the  delight  of  friends. 

No  kind  of  business,  and  especially  no  branch  of  insurance,  can  be  carried  on 
with  safety  till  its  laws  have  been  generalized  from  a  wide  range  of  experience.  In 
the  case  of  the  Travelers,  it  was  necessary  to  get  the  experience  and  to  deduce  the 
governing  principles  simultaneously.  The  process  of  adjustment  demanded  frequent 
and  radical  changes  in  classifications  and  rates,  introducing  confusion  into  methods, 
annoying  and  losing  patrons,  and  exciting  in  faithful  agents  ebullitions  of  sore  dis- 
pleasure. The  knife  of  the  surgeon  was  in  constant  requisition.  Meanwhile  the 
executive  ofiicers  did  not  sleep  on  beds  of  roses,  at  least  till  the  small  hours  of  the 
morning,  for  midnight  often  found  them  at  headquarters,  toiling  over  the  solution  of 
changeful  problems  or  anxiously  discussing  what  should  be  done  next. 


108  INSURANCE   IN  CONNECTICUT. 

The  palpable  benefits  of  the  system,  the  disbursement  over  a  wide  area  of  many- 
small  sums  to  injured  persons  who  fortunately  held  policies  in  the  Travelers,  the 
gratuitous  advertising  given  to  the  business  by  its  relations  to  destructive  railway 
accidents,  though  jjroductive  of  a  copious  inflow  of  premiums,  damaged  the  company 
at  a  certain  stage  of  growth  in  two  ways.  Men  engaged  in  dangerous  pursuits  in- 
sured in  large  numbers  before  the  actual  cost  of  the  hazard  had  been  determined, 
and,  in  fact,  bought  indemnity  much  too  low.  Perils  from  this  source  passed  away 
as  enlarged  experience  enabled  the  officers  to  correct  the  tables.  The  other  danger 
came  from  the  opposite  quarter,  and  though  serious  enough  in  the  thick  of  the  figlit, 
now  seems  almost  ludicrous  when  viewed  in  connection  with  the  mental  conditions 
which  preceded  and  followed  in  swift  succession.  Reversing  the  normal  sequence  of 
development,  the  age  of  skepticism  yielded  place  to  an  age  of  faith,  and  before  the 
doubting  Thomases  near  home  had  ceased  to  hum,  with  a  slight  accent  of  derision, 
"what  will  the  harvest  be?"  a  swarm  of  casualty  companies, organized  in  1865  and 
1866,  rushed  wildly  into  the  field.  Witli  ample  powers  of  destriiction  all  lacked  the 
art  of  construction,  and  after  emulating  the  feats  of  the  historic  bull  in  the  china 
shop,  sank  one  by  one  into  unremembered  graves,  and  though  mourners  were  many, 
the  only  monuments  of  the  departed  are  tlie  death  records  in  the  state  insurance 
reports. 

During  the  winter  of  1864  five  western  states  chartered  over  a  dozen  accident 
comj^anies.  Elsewhere  others  were  striving  with  frenzied  haste  to  reach  fields  that 
were  supposed  to  glow  with  golden  harvests.  Nearly  all  began  to  issue  railway  acci- 
dent tickets,  bringing  such  confusion  upon  the  business  that  obviously  some  form  of 
combination  could  alone  save  strong  and  weak  alike  from  common  ruin.  To  pave 
the  way,  in  May,  1865,  the  managers  of  the  Travelers  procured  a  Connecticut  charter 
for  the  Railway  Passengers  Assurance  Company  for  risks  by  travel  alone,  amended 
the  following  year  to  include  general  accidents  and  life  insurance.  The  first  meet- 
ing of  presidents  and  representatives  was  held  at  Cincinnati,  O.,  June  15,  1865. 
Others  followed.  At  length,  in  1866,  seven  companies  united  to  prosecute  the  work 
for  their  joint  benefit  under  a  single  management  and  a  uniform  system  extending 
over  the  whole  country.  The  instrument  was  the  Railway  Passengers  Assurance 
Company,  in  which  each  as  a  corporation  took  stock  and  had  representation  in  the 
directorate.  It  was  organized  on  a  capital  of  ^260,000,  with  ;g44,Soo  more  allowed 
for  equi]3ments  taken  or  canceled,  making  a  total  of  $304, 800,  of  which  the  Trav- 
elers held  $128,600.  James  G.  Batterson  was  elected  president,  and  headquarters 
were  located  in  Hartford.  By  a  singular  fatality  all  the  others  found  the  losses  from 
the  residue  of  their  business  too  great  to  be  repaired  by  the  dividends  from  their 
common  offspring.  A  kind  of  cholera  infantum  carried  off  most  of  the  lot  in  1867. 
At  the  end  of  five  years  the  Travelers  was  left  sole  sun-ivor,  residuar}'  legatee  and 
reinsurer  of  the  rest.  Having  bought  the  shares  of  its  late  associates,  the  company 
in  1878  turned  the  Railway  Passengers  into  the  ticket  department  of  its  own  office. 
In  1 87 1  not  an  American  rival  was  left,  for  the  concerns  which  declined  to  enter  the 
union  had  perished  even  more  summarily. 

As  a  rule  the  officers  and  employees  of  the  Travelers  have  been  singularly  loyal 
to  its  interests.  At  the  end  of  three  decades  there  had  been  few  removals  from  the 
official  corps  by  death,  and  few  withdrawals  from  the  office  force  from  any  cause 
whatever.  An  element  of  discontent  seceded  in  1 874,  having  carefully  prepared  for  the 
event.  The  assistant  secretary  and  the  actuary  went  out  to  take  the  ^•ice-presidency 
and  the  secretaryship  respectively  of  the  Hartford  Accident  Insurance  Company, 
which  was  chartered  in  June,  1874,  and  soon  began  business  on  a  capital  of  $200,000. 


INSURANCE   IN  CONNECTICUT.  109 

Richard  D.  Hubbard,  afterwards  jjovernor,  was  induced  to  take  the  presidency. 
A  noted  humorist,  in  a  speech  industrioush'  circulated,  ])rocured  for  the  new  concern 
no  small  amount  of  gratuitous  advertising.  Yet  in  two  short  years  the  fledgeling 
was  dead  and  buried  with  every  dollar  sunk.  Luckily  the  jokes  were  let  loose  before 
the  first  course  of  the  barmecide  feast. 

October  25,  1S65,  the  directors  voted  to  introduce  and  prosecute  the  life  depart- 
ment of  insurance.  The  business  was  conducted  on  the  purely  stock  plan  and  was 
pushed  as  fast  as  due  regard  to  the  requirements  of  a  legal  reserve  would  permit. 
Although  the  loss  ratio  was  exceptionally  small,  the  rates  charged  were  so  low  and 
the  business  grew  so  rapidly  that  not  until  1S73  did  the  balance  sheet  of  the  life 
department  show  a  technical  profit.  For  a  number  of  years  so  great  was  the  popu- 
larity of  its  life  policies  that  the  company  was  forced  to  reject  many  first-class  risks 
I  in  order  to  avoid  swelling  the  deficit  to  figures  that  to  the  uninformed  might  be  made 
,to  appear  alarming.  Yet  from  the  start  the  prosperity  of  the  department  far 
exceeded  estimated  results  as  embodied  in  tables  of  mortality.  In  the  early  stages 
the  Travelers  skillfully  used  the  profits  of  the  Accident  to  promote  and  protect  the 
growth  of  the  life  department.  Behind  both  was  the  security  aflTorded  by  a  sound  capital. 

At  the  first  meeting  the  stockholders  voted  to  increase  the  capital  from 
;g20o,ooo  to  ^250,000.  March  19,  1864,  50  per  cent,  of  the  subscriptions,  inclusive  of 
previous  payments,  was  called  in  cash.  In  June,  1864,  by  an  amendment  to  the 
charter,  an  increase  to  an  amount  not  exceeding  ^1,000,000,  was  authorized.  The 
following  October  the  directors  voted  to  increase  it  to  an  amount  not  exceeding 
^400,000.  December  4,  1865,  the  board  declared  from  surplus  earnings,  a  dividend 
of  25  per  cent.,  payable  in  the  stock  of  the  company  at  par.  For  the  benefit  of 
owners,  unadjusted  fractional  shares  were  sold  at  auction  at  the  Merchants'  Ex- 
change, and  brought  iSjyi  Ov  ■'4-  Meanwhile,  the  balance  of  the  stock  notes  given 
for  subscriptions  had  been  paid  in  cash  in  convenient  installments.  The  capital 
remained  at  ;$5oo,ooo  from  December,  1865,  till  January  i,  1875,  when  $100,000  was 
added  by  a  dividend  from  surplus.  Similarly  it  was  raised  from  $600,000  to  S  1,000,- 
000,  April  I,  1892. 

Having  outgrown  rented  rooms,  the  Travelers  purchased^  in  1872,  the  historic 
mansion  at  the  northeast  corner  of  Prospect  and  Grove  streets,  built  in  1820  by 
Henry  L.  Ellsworth,  first  commissioner  of  patents,  and  occupied  among  others,  by 
Oliver  Wolcott,  secretary  of  the  United  States  Treasury  under  Washington,  governor 
of  Connecticut,  etc.  ;  Professor  Charles  Davies ;  Roswell  C.  Smith,  manufacturer  of 
school-books  ;  Isaac  Toucey,  governor,  secretary  of  the  navy,  etc.  In  1891  the  com- 
pany added  a  third  story  to  the  original  building,  a  new  wing  on  the  northwest 
corner,  and,  in  the  rear,  running  parallel  to  Grove  street,  a  new  wing  one  hundred 
by  twenty-five  feet,  three  stories  high.  Four  fire-proof  vaults  were  added  to  the  five 
already  in  use.  Granite  steps,  surmounted  by  a  portico  of  granite,  appropriately 
symbolize  the  solidity  of  the  institution  to  which  they  lead. 

A  ver\'  great  proportion  of  the  losses  in  the  accident  department  of  the  Trav- 
elers come  from  the  ordinary  casualties  daily  occurring  all  over  the  country,  which 
attract  little  attention  beyond  a  limited  circle ;  the  large  sunrs  which  the  company  is 
often  required  to  pay  to  the  injured  and  to  the  heirs  of  the  killed  after  notable 
disasters,  making  but  a  small  fraction  of  its  disbursements.  Still,  death  claims 
alone  amounted  to  $32,000  from  the  railway  accident  at  Angola,  Januar}-,  1868  ;  to 
$43,000,  at  Carr's  Rock,  April,  1868  ;  to  $20,000,  at  New  Hamburg,  February-,  1871  ; 
to  $13,000,  steamer  "Metis,"  September,  1S72  ;  to  $52,000,  at  Ashtabula,  January, 
1877  ;  to  $15,000,  at  Chatsworth,  111.,  August,  1887. 


110  INSURANCE   IN   CONNECTICUT. 

At  the  time  of  the  great  conflagration,  one  hundred  and  eighty-one  Chicago 
firemen  held  policies  in  the  Travelers,  and  not  one  was  injured,  though  over  $20,000 
had  previously  been  paid  there  on  this  single  class  of  risks. 

The  Travelers  Record^  established  in  1865,  and  issiied  monthly  from  the  home 
office,  by  giving  wide  currency  to  facts  and  arguments  showing  the  benefits  of 
casualty  insurance,  has  aided  materially  in  enlightening  the  public,  and  thus  extend- 
ing the  business.  Edwin  G.  Barrows,  first  editor,  was  succeeded  at  his  death,  in 
1875,  by  William  M.  Pearl.  Forrest  Morgan  followed  in  November,  1882.  Mr. 
Morgan  retired  in  March,  1896,  and  was  succeeded  by  George  William  Ellis,  a  son  of 
the  secretary,  and  a  recent  graduate  of  Trinity  College.  Under  the  editorship  of 
Mr.  Morgan  the  company,  in  1889,  issued,  as  a  souvenir,  in  five  volumes,  the  collected 
writings  of  Walter  Bagehot. 

Why  has  the  Travelers  prospered  while  all  rivals,  save  two  or  three  late  entries, 
have  perished?  Many  minor  reasons  might  be  given,  but  they  all  run  back  to  a 
common  source — diff"erences  of  management.  The  company  was  not  started  as  an 
asylum  for  failures  in  the  struggle  for  existence,  but  from  its  inception  has  been 
guided  by  men  of  great  capacity,  with  definite  and  inflexible  aims. 

It  can  be  said  of  James  Goodwin  Batterson,  the  president,  that  he  has  done  much 
on  many  diS'erent  lines,  and  has  excelled  in  every  field  of  effort.  Only  a  person  of 
extraordinary  strength,  physical  and  mental,  could  so  break  through  the  limitations 
that  defy  the  ambition  and  hinder  the  success  of  all  save  a  favored  few.  He  was 
born  in  Bloomfield,  Conn.,  February  23,  1823,  spent  his  boyhood  in  New  Preston, 
fitted  for  college  in  the  academy  at  Warren,  served  an  apprenticeship  in  a  printing- 
office  in  Ithaca,  N.  Y.  ;  returning  home,  studied  law  with  Judge  Origen  S.  Seymour, 
and  then  entered  the  marble  works  of  his  father  in  Litchfield.  Five  years  later,  the 
headquarters  of  the  house  were  moved  to  Hartford.  From  making  monuments  the 
operations  of  Mr.  Batterson  soon  extended  to  the  construction  of  buildings,  at  first 
at  home,  and  then  over  a  rapidly-broadening  area.  Among  the  structures  thus 
erected  may  be  mentioned,  in  Hartford,  the  marble  building  of  the  Phoenix  National 
Bank,  the  granite  and  marble  work  of  the  home-office  of  the  Connecticut  Mutual 
Life,  the  State  Capitol  ;  in  New  York  city,  the  Worth  monument,  built  in  1857,  the 
stone  and  marble  work  of  the  Mutual  Life,  of  the  Equitable  Life,  of  the  Manhattan 
and  other  banks,  of  the  Waldorf  and  Imperial  Hotels,  of  the  Vanderbilt  houses,  both 
there  and  at  Newport;  in  Providence,  of  the  City  Hall ;  in  Washington,  of  the  new 
congressional  library,  etc.  His  marble  works  in  New  York  city,  established  about 
i860,  in  normal  times  give  employment  to  five  hundred  hands.  His  granite  quarries 
in  Westerly,  R.  I.,  grade  among  the  first  in  the  country.  Mr.  Batterson  was  the  first 
person  in  the  United  States  to  use  machinery  for  polishing  granite.  The  upbuilding 
of  the  Travelers  has  beeu  another  integral  part  of  his  varied  career. 

With  so  many  practical  aflfairs  continually  pressing  upon  him,  Mr.  Batterson  has 
somehow  found  time  to  become  a  finished  scholar,  writer  and  speaker.  His  studies 
embrace  Greek,  Latin,  the  modern  languages,  Egyptology,  political  economy,  science, 
philosophy,  sociology  and  general  literature,  and  he  is  proficient  in  all.  He  is  also  a 
connoisseur  in  art,  and  the  owner  of  a  large  and  choice  collection  of  paintings. 

Rodney  Dennis,  secretary  from  the  beginning  till  March,  1896,  was  born  at 
Topsfield,  Mass.,  January  14,  1826,  came  to  Hartford  when  sixteen  years  old,  and, 
having  served  an  apprenticeship  in  the  grocery  trade,  established  the  house  of  Dennis 
&  Ives  at  the  age  of  twenty-one.  A  few  years  later  his  partner  fell  sick  and  never 
returned  to  work,  while  he  was  disabled  for  months  by  a  serious  accident.  He  now 
sold  his  interest,  and  going  to  Augusta,  Ga.,  entered  the  employ  of  the  historic  firm 


JOHN  U.  LEWIS,  M    D.. 
Surgeon  and  Adjuster. 


F.DWARD  V.  PRESTON, 
Siipt.  of  Agencies. 


TRAVELERS  INSURANCE  COMPANY. 


INSURANCE   IN   CONNECTICUT.  Ill 

of  Hand,  Williams  S:  Wilcox.  After  two  years  there  and  two  in  Albany'  he  returned 
to  Hartford  in  1S55,  and  was  connected  with  the  Phojnix  Bank  till  he  took  thesecre- 
tarj'ship  of  the  Travelers  in  1864.  At  first  he  attended  to  all  the  details  of  the  busi- 
ness without  assistance  of  any  kind,  toiling  till  late  into  the  night,  and  keeping  up 
the  habit  with  few  relaxations  for  many  years.  There  was  a  constant  struo-o-le 
between  physical  endurance  and  consecration  to  work.  Other  employees  caught  his 
spirit  and  followed  his  example.     Thus  largely  was  success  won. 

A  man  of  public  spirit  and  great  heart  Mr.  Dennis  has  opened  his  purse  with 
notable  freedom  to  aid  a  great  variety  of  enterprises  that  held  out  a  promise  of  pro- 
moting the  welfare  of  the  city,  and  to  charities,  organized  and  private,  has  given 
tinstintingly  of  money,  time  and  effort. 

Looking  to  both  sides  the  company  has  always  dealt  fairly  and  justly  in  settling 
with  claimants.  By  holding  old  and  attracting  new  patrons  the  policy  has  been 
fruitful  in  benefits. 

George  Ellis,  secretary',  was  born  in  Hartford  September  17,  1843,  educated  as 
a  civil  engineer  at  the  Rensselaer  Polytechnic,  Troy,  and  entered  the  navy  in  Novem- 
ber, 1861,  as  an  oflicer  of  the  engineer  corps,  remaining  till  1868,  when  he  resigned  to 
enter  upon  the  practice  of  his  profession  in  connection  with  railway  construction  in 
]\Iinnesota.  In  187 1  he  removed  to  New  York  city  to  act  as  professional  consulting 
engineer  in  railway  enteq^rises  in  which  his  friends  were  engaged.  He  became 
actuary  of  the  Travelers  in  June,  1874,  and  was  elected  secretary  January  27,  1S97. 

John  E.  Morris,  assistant  secretary,  was  born  in  Springfield,  Mass. ,  November  30, 
1843,  came  to  Hartford  in  the  spring  of  i860,  was  connected  with  the  Charter  Oak 
Bank  till  September  20,  1862,  when  he  enlisted  in  Company  B,  Twenty-second  regi- 
ment Connecticut  Volunteers,  and  remained  in  service  till  the  expiration  of  the  term 
of  enlistment,  July  7,  1863.  He  was  the  first  clerk  employed  by  the  Travelers, 
having  taken  his  place  at  the  head  of  the  column  July  6,  1864.  In  May,  1874,  he 
was  elected  assistant  secretary. 

Edward  V.  Preston,  superintendent  of  agencies,  was  born  in  Willington,  Conn., 
June  I,  1837,  moved  to  Hartford  in  1850,  and  followed  mercantile  pursuits  till  the 
outbreak  of  the  war.  In  July,  1861,  he  was  appointed  quartermaster  of  the  Fifth 
Connecticut,  with  the  rank  of  first  lieutenant.  After  various  services  he  was  com- 
missioned by  the  president,  February  19,  1S63,  as  additional  paymaster  United  States 
Volunteers,  with  the  rank  of  major,  and  so  continued  till  honorably  discharged  July 
31,  1865.  He  at  once  entered  the  Travelers,  and,  after  working  two  years  as  special 
agent,  was  appointed  superintendent  of  agencies — a  position  which  he  has  since  held 
contiinioush'. 

John  B.  Lewis,  M.  D.,  surgeon  and  adjuster,  was  born  in  Suffolk  county,  N.  Y., 
March  10,  1832  ;  graduated  on  his  twenty-first  birthday  from  the  University  Medical 
College  of  New  York  city  ;  settled  at  Vernon,  Conn. ;  was  commissioned  as  surgeon  of 
the  Fifth  Connecticut,  July  3,  1861  ;  in  the  spring  of  1862  was  commissioned  as 
brigade  surgeon  United  States  Volunteers,  and  was  soon  after  made  medical  director 
of  Shield's  division  ;  and  from  1863  to '65  was  in  charge  of  the  United  States  general 
hospital  at  Cumberland,  Md.  He  remained  till  after  the  close  of  the  war,  having 
been  present  in  thirteen  battles  and  skirmishes,  including  Antietam. 

Since  1869  he  has  devoted  his  time  and  talents  to  the  medical  department  of  the 
Travelers,  writing  meanwhile  numerous  papers  on  historical,  medical  and  medico- 
legal subjects.  His  most  elaborate  work  is  a  large  volume  prepared  under  the  joint 
authorship  of  himself  and  Dr.  C.  C.  Bombaugh,  of  Baltimore,  describing  the 
many  plots  and  stratagems  for  defrauding  life  insurance  companies  and  the  manner 
of  their  detection. 


112  INSURANCE   IX   CONNECTICUT. 

Sylvester  C.  Dunham,  counsel,  was  born  in  Mansfield,  Conn.,  April  24,  1846; 
was  educated  at  the  State  Normal  School,  New  Britain,  Conn.,  and  at  Mount  Union 
College,  Ohio  ;  studied  law  with  Charles  E.  Mitchell,  of  New  Britain  ;  and  on  admis- 
sion to  the  bar  moved  to  Hartford  in  1871,  where  he  was  engaged  in  general  practice 
for  twelve  years.  In  1885  the  interests  of  the  Travelers  Insurance  Company  in  Colo- 
rado irrigation  enterprises  became  involved  in  litigation  through  the  operations  of 
The  Colorado  Loan  and  Trust  Company.  Accounting  proceedings  were  commenced 
in  the  United  States  Circuit  Court  by  which  it  was  sought  to  recover  a  judgment 
against  the  Travelers  for  more  than  ^1,000,000.  Mr.  Dunham  was  employed  to 
devote  his  entire  attention  to  this  litigation,  for  which  purpose  he  visited  Colorado 
eighteen  times.  The  litigation  continued  seven  years  and  resulted  in  the  recovery 
by  the  Travelers,  and  companies  associated  with  it,  of  absolute  title  to  some  seventy 
thousand  acres  of  land  and  the  canals  built  to  supply  it  with  water,  and  a  judgment 
in  favor  of  the  Travelers  and  against  the  plaintiffs  for  about  §94,000.  Mr.  Dunham 
has  since  had  the  general  oversight  of  the  properties  so  acquired,  which  are  held  by 
five  Colorado  land  and  canal  companies  of  which  he  is  the  secretary  and  treasurer, 
the  Travelers  being  the  principal  stockholder.  He  is  also  the  general  counsel  of 
the  Travelers,  having  charge  of  its  legal  affairs  at  the  home  office,  and  is  a  member 
of  the  board  of  directors. 

January  i,  1897,  the  total  assets  of  the  Travelers  amounted  to  §20,896,684.63, 
with  a  surplus  to  policy-holders  of  §2,976,424.36,  of  which  §1,000,000  is  in  capital 
stock. 

THE  HARTFORD  STEAM  BOILER  INSPECTION  AND  INSURANCE  COMPANY. 

As  remarked  already  two  attempts  in  Hartford  to  introduce  novel  and  untried 
forms  of  insurance  have  proved  notably  successful.  In  both  cases  the  result,  made 
more  striking  by  the  failure  of  imitators  and  short-lived  rivals,  is  clearly  due  to  intel- 
ligence and  skillfulness  of  management. 

In  the  mind  of  the  projectors  the  conception  of  the  above  company  was  several  years 
in  taking  form.  At  the  time  water  was  still  largely  used  to  drive  machinery  in  manu- 
facturing villages,  but  in  towns  steam,  from  necessity,  was  taking  its  place.  Change 
to  the  new  motive  power  was  hastened  by  the  inevitable  concentration  of  skilled 
labor  in  cities.  But  the  transfer  was  attended  by  great  destruction  of  life  and  prop- 
erty. Conspicuous  among  casualties  was  the  almost  daily  record  in  newspapers  of 
steam-boiler  explosions.  Engine  makers  and  users  had  not  learned  how  to  handle 
with  safety  the  mighty  agent.  In  not  a  few  instances  criminal  carelessness  came  to 
the  help  of  ignorance  in  inviting  disaster. 

There  was  no  legal  and  little  moral  restraint  to  hold  in  check  the  recklessness. 
The  notion  prevailed  that  a  certain  waste  of  life  and  property  in  the  use  of  steam  was 
unavoidable.  Attention,  too,  was  diverted  from  responsible  agents  by  the  habit  of 
speaking  of  disastrous  explosions  as  the  "act  of  God,"  or  by  otherwise  hiding  the 
human  element  under  similar  euphemistic  expressions. 

In  the  year  1857  a  coterie  of  young  men  in  Hartford,  drawn  together  by  con- 
genial aims,  organized  the  "Polytechnic  Club,"  with  the  view  primarily  of  investi- 
gating and  discussing  questions  of  science  in  relation  to  practical  utilities.  Among 
the  members  were  Elisha  K.  Root,  who  succeeded  Colonel  Colt  in  the  presidency  of  the 
armory,  Francis  A.  Pratt,  Amos  W.  Whitney,  E.  M.  Reed,  Professor  C.  B.  Richards, 
of  Yale;  Charles  F.  Howard,  Joseph  Blanchard,  J.  M.  Allen  and  others.  Several 
members  of  this  earnest  but  unpretentious  club  have  since  won  international  fame. 

As  a  power  coming  more  and  more  into  use,  but  then  under  very  imperfect  con- 


INSURANCE   IN   CONNECTICUT.  113 

trol,  steam  became  a  favorite  topic  in  the  club.  Tlie  results  of  foreign  study  and 
experiment  were  eagerly  appropriated.  Members  discussed  the  causes  of  boiler 
explosions  and  means  of  prevention.  It  became  known  that  the  Manchester  Steam 
Users'  Association  had  already  been  organized  in  England  with  the  view  of  prevent- 
ing such  accidents  bv  periodical  inspection.  Under  the  s>stem  as  started  there  the 
manufacturer  paid  a  certain  sum  annually  for  examination,  receiving  in  return  either 
a  certificate  of  the  safe  condition  of  his  boiler  or  a  report  condeuming  it,  but  the  cer- 
tificate, like  those  in  some  places  since  issued  by  direct  appointees  of  the  state, 
involved  no  pecuniary  obligation  whatever,  and  if  disaster  occurred,  the  paper,  while 
relieving  the  holder  from  the  charge  of  carelessness,  entitled  him  to  no  indemnity. 

Although  not  one  of  the  members  of  the  Polytechnic  Club  was  connected  with 
insurance,  the  body  unconsciously  drew  inspiration  from  the  local  predominance  of 
the  interest,  which  was  then  making  Hartford  famous  as  the  home  of  skilled  under- 
writers. In  the  course  of  the  debates  on  the  subject  the  attention  of  members  was 
attracted  to  the  feasibility  of  combining  a  guaranty  with  tlie  inspection,  thus  giving 
both  parties  to  the  contract  a  pecuniary  interest  in  the  safet\'  of  the  boiler.  So  far 
as  known,  the  conception  had  not  at  that  time  materialized  elsewhere.  Although 
distinctly  evolved  in  the  club,  the  seminal  idea  waited  several  years  for  further  de- 
velopment on  account  of  the  intervention  of  the  Ci\il  War. 

A  charter  was  procured  in  Jtme,  1866,  incorporating  The  Hartford  Steanr  Boiler 
Inspection  and  Insurance  Company,  "for  inspecting  steam  boilers,  and  for  insuring 
against  loss  or  damage  to  property  arising  from  explosions  or  other  accident  in  the 
use  of  steam  boilers."  The  capital  stock  was  to  be  not  less  than  two  hundred  thou- 
sand nor  more  than  one  million  of  dollars,  of  which  ten  per  cent,  was  required  in 
cash  at  the  time  of  subscription,  and  ten  per  cent,  more  within  sixty  days  after  or- 
ganization. 

August  31,  1 866,  the  connnissioners  met  and  decided  to  open  books  on  the  loth 
of  September  at  the  office  of  the  Connecticut  River  Banking  Company  for  subscrip- 
tions to  the  capital,  which  they  fixed  at  five  hundred  thousand  dollars.  The  shares 
having  all  been  taken,  the  stockholders  met,  October  6th,  and  elected  the  following 
board  of  directors :  Henry  Kellogg,  Richard  W.  H.  Jarvis,  Frank  W.  Cheney,  John 
A.  Butler,  Charles  M.  Beach,  Jonathan  B.  Bunce,  Daniel  Phillips,  George  M.  Bar- 
tholomew, James  G.  Batterson,  Marshall  Jewell,  Edward  M.  Reed,  all  of  Hartford; 
George  Crompton,  Worcester  ;  Daniel  L.  Harris,  Springfield  ;  Earl  P.  ]\Iason,  Provi- 
dence ;  George  Ripley,  Lowell ;  F.  Ratchford  Starr,  Philadelpliia ;  Edwin  D.  Mor- 
gan, New  York. 

There  was  some  delay  in  completing  the  organization.  As  an  initial  step  the 
board  desired  to  secure  J.  M.  Allen  as  president.  Although  then  a  >oung  man  of 
thirt)--three,  Mr.  Allen  had  become  known  as  an  earnest  investigator  in  the  fields  of 
science.  ludirectlv  the  discussions  in  which  he  took  a  leading  part  had  led  up  to 
the  formation  of  the  compan}-.  At  this  juncture,  however,  he  had  made  an  engage- 
ment for  a  )ear  in  New  York  city  and  was  forced  to  decline.  October  13th  H.  H. 
Hay  den  was  elected  secretary,  and  November  loth  Enoch  C.  Roberts,  president. 

At  the  outset,  strangely  enough,  the  enterprise  suflFered  from  open  lack  of  faith 
on  the  part  of  those  who  appeared  before  the  public  as  its  sponsors.  After  a  trial  of 
a  few  weeks,  Mr.  Roberts  sent  in  his  resignation,  but  was  induced  to  let  it  rest  with- 
out action  till  the  following  summer.  Director  after  director  sold  his  stock  and  fol- 
lowed the  example  of  the  president.  Others  with  difficulty  were  induced  to  step 
into  the  vacancies.  General  demoralization  prevailed.  The  question  of  retiring 
from  business  was  seriouslv  discussed. 
8 


Hi  INSURANCE    IN    CONNECTICUT. 

Ill  its  troubles  the  board  again  turned  to  Mr.  Allen.  He  was  now  free  to  listen 
to  overtures,  and,  on  the  report  of  the  committee  appointed  to  confer  with  him,  was 
elected  president,  September  i6,  1867. 

At  the  annual  meeting  of  the  stockholders  in  1868,  the  condition  of  the  com- 
pany had  so  improved  that  a  special  vote  was  passed  expressive  of  their  gratification, 
and  their  confidence  in  the  future. 

For  a  long  time  the  process  was  slow,  the  toil  incessant,  and  the  way  weari- 
some. Most  seemed  to  regard  the  new  departure  as  a  useless  novelty,  that  must  soon 
run  its  short-lived  course.  What  will  Hartford  people  undertake  to  insure  next? 
was  a  question  often  asked  in  tones  of  undisguised  derision.  In  the  hands  of  a  man- 
ager less  firm  in  conviction,  or  less  conciliatory  in  manner,  the  prophecy  of  disaster 
irrust  have  wrought  its  own  fulfillment.  Mr.  Allen  met  the  fla\'or  of  sarcasm  with  the 
antidote  of  pleasantry,  and  toiled  on  to  create  a  demand  which  it  should  be  his  future 
business  to  supply. 

For  the  first  five  years  the  company  occupied  a  single  room,  sixteen  by  eighteen 
feet  square,  and  for  the  same  period  the  floor  of  the  vault  was  spread  with  papers  for 
the  protection  of  the  books,  from  the  unwillingness  of  the  officers  to  go  to  the 
extravagance  of  fitting  it  up  with  shelves.  In  a  moment  of  self-indulgence,  the 
l^resident  did  invest  $14  in  a  desk  for  his  own  use,  but  such  outbreaks  of  luxury 
seldom  occurred. 

It  is  an  open  secret  that  all  the  successful  insurance  companies  of  Hartford  prac- 
ticed the  most  rigid  economy  till  their  business  became  thoroughlv  established,  while 
those  which  set  out  with  tlie  theory  that  success  could  be  hastened  bv  a  liberal  scale 
of  exjjenditure,  invariably  dropped  into  the  sleep  that  knows  no  awakening.  Other 
beginners  may  profit  by  the  lesson. 

Although  the  income  of  the  company  was  at  first  small,  the  thoroughness  of  its 
inspections  saved  it  almost  wholly  from  losses.  Tiie  cost  of  testing  far  exceeded  any 
other  item  of  outlay.  For  several  years  state  insurance  departments,  recognizing 
the  exceptional  character  of  the  business,  and  noting  the  infrequency  of  losses,  did 
not  require  any  charge  to  be  made  to  liabilities  for  reinsurance-reserve.  Hence 
savings  over  current  ex2:)enses  appeared  on  the  books  as  net  profits.  Ten  per  cent. 
in  dividends  on  the  cash  capital  was  paid  in  1869,  eight  in  1871,  and  since  then  never 
less  than  ten.  Besides,  in  1872,  ;g20,ooo  from  profits  were  indorsed  on  the  stock  notes, 
^30,000  in  1873,  $25,000  in  January,  1874,  and  ^15,000  the  following  October.  In 
less  than  three  years,  out  of  surplus  earnings,  the  cash  capital  had  grown  from  $100,- 
000  to  $190,000.  Meanwhile  laws  had  been  passed  in  several  states  excluding  stock 
notes  from  admitted  assets.  Under  the  head  of  capital  these  were  charged  as  a  lia- 
bility, and,  hence,  instead  of  a  help,  became  a  dead  weight,  burdensome  in  the  ratio 
of  volume.  Accordingly,  in  October,  1874,  under  an  act  amending  the  charter,  the 
capital  was  reduced  from  $500,000  to  $200,000,  and  the  par  of  the  shares  from  $100 
to  $40.  The  stockholders  were  called  on  for  $10,000  to  make  it  fully  paid  at  once. 
In  1883  the  General  Assembly  empowered  the  company  to  restore  the  capital  to  the 
amount  authorized  in  the  original  charter  by  increasing  either  the  number  or  par  of 
the  shares.  In  February  it  was  increased  to  $250,000  by  a  dividend  of  $50,000  from 
profits.  Here  it  remained  till  the  annual  meeting  in  1887.  Meanwhile  the  yearly 
business  had  grown  thirteen-fold  since,  in  October,  1868,  the  board  saw  fit  to  spread 
on  the  record  a  vote  of  congratulation  over  brightening  prospects.  Numerous  fail- 
ures in  all  kinds  of  insurance  had  taught  tiie  public  to  demand  strength  on  the  part 
of  those  to  whom  they  looked  for  indemnity.  Rivals  came  and  went,  and,  during 
their  brief  sojourn  in  the  land  of  the  living,  often  sought  patronage  by  a  vain  show 


INSURANCE   IX    CONNECTICUT.  ]]r, 

of  wealth.      To  meet  the  situation,  tlie  company  early  in  iSS/rai.sed  the  capital  to 
$500,000  bv  allowing  each  .stockholder  to  take  hi.s  proportion  at  par  in  cash. 

During  the  first  year  of  his  incumbency,  Mr.  Allen  .started  the  J^ocomolivi\  a 
mouthh'  which  has  built  up  a  body  of  valuable  literature  concerning  the  .steam 
boiler  and  cognate  subjects.  In  it,  after  exhaustive  investigation,  are  treated,  with 
various  illustrative  aids,  particular  cases  of  explosion,  with  the  view  of  explaining 
the  exact  cause.  From  the  multiplicity  of  inquiries  thus  pursued,  generalizations 
of  the  utmost  value  have  been  formed.  Thirty-two  thousand  copies  are  distributed 
each  month,  and  the  paper  is  highly  prized,  not  only  b)'  practical  men,  but  also  by 
students  of  science.  A.  D.  Risteen,  a  graduate  of  the  Worcester  Polytechnic  School, 
is  associate  editor. 

In  the  prosecution  of  the  work  the  energies  of  the  company  are  mainly  directed 
to  the  cure  of  defects  and  the  prevention  of  disaster.  Boilers  under  its  care  are 
visited  by  experts  at  stated  periods,  and  thoroughly  examined,  while  the  appliances 
intended  to  secure  safety  are  put  in  complete  order.  During  the  year  1896,  twelve 
thousand,  nine  hundred  and  eight)-eight  dangerous  defects  were  reported,  and  six 
lumdred  and  sixty-three  boilers  were  condemned.  From  the  outset  the  company  has 
made  two  millions,  one  hundred  and  sevent}- -seven  thousand  and  forty-five  inspections, 
discovered  one  hundred  and  ninety-six  thousand  and  forty-six  dangerous  defects,  and 
condemned  ten  thousand,  four  hundred  and  sixty-three  boilers.  Had  these  been 
allowed  to  go  undetected,  the  neglect  in  bad  cases  would  have  borne  fruit  hereafter 
in  the  needless  destruction  of  life,  limb,  and  property.  This  part  of  the  work  is 
performed  by  two  hundred  and  twenty-five  skilled  and  trained  insjiectors. 

Some  defects  are  bejond  the  reach  of  human  scrutiu}-,  and  hence,  with  the 
resources  now  at  our  command,  the  element  of  danger  cannot  be  completely  elimi- 
nated. In  case  of  explosion  or  rupture,  the  company  makes  good  all  loss  or  damage 
to  property,  with  indenmity  for  loss  of  life  or  personal  injury,  to  an  amount  not 
exceeding  the  sum  insured. 

The  home  office  is  a  magazine  of  statistics  and  information,  collected  from  all 
parts  of  the  country,  and  relating  to  every  phase  of  the  business,  and  of  the  whole 
patrons  have  the  benefit  free. 

The  company  furnishes  to  the  insured  plans  and  specifications  for  boilers, 
settiirgs,  and  piping ;  also  for  steam  chimneys,  and  when  desired,  supen-ises  the 
erection,  at  reasonable  expense.  These  embody  the  principles  taught  by  scientific 
research  and  approved  by  experience,  as  made  to  subserve  the  attainment  of  the 
highest  degree  of  economy,  efficiency  and  safety.  Many  large  plants  thus  built  in 
a  few  years  ha\e  saved  the  original  cost  in  fuel  alone.  Suggestions  in  the  way  of 
economv,  care  and  management  make  a  part  of  the  ordinary  inspections. 

Calls  upon  the  company  for  structural  plans  long  ago  became  so  numerous  as  to 
require  a  separate  department  for  attending  to  this  branch  of  the  work.  Advice  is 
asked  on  all  kinds  of  mechanical  and  engineering  questions  connected  with  the  use 
of  steam  both  for  power  and  heating.  Of  special  value  are  the  studies  here  prosecuted 
in  regard  to  the  material,  form,  setting  and  riveting  of  boilers.  The  matter  of  rivet- 
ing joints  has  been  worked  out  with  great  care.  As  each  hole  weakens  tiie  plate, 
the  problem  is  to  find  the  frequency  and  size  that  assure  the  highest  attainable  strength. 
After  solving  the  problem  mathematically,  President  Allen  caused  joints  to  be  made 
in  exact  conformitv  with  the  theory  thus  deduced.  These  were  then  tested  at  the 
United  States  arsenal  at  Watertown,  Mass.,  when  the  strength  was  found  to  be  within 
two-tenths  of  one  per  cent,  of  his  computation.  He  foretold,  too,  the  exact  place  of 
fracture  when  the  resistance  of  the  joint  was  finally  overcome. 


116  INSURANCE    IN   CONNECTICUT. 

The  compan)-  has  a  chemical  laboratory  under  immediate  charge  of  George  H. 
Seyms,  for  the  analysis  of  water.  In  some  parts  of  the  country  water  apparently 
good  is  found  to  be  wholly  unsuitable  for  steam,  depositing  a  scale  and  corroding 
the  interior  of  boilers.  In  each  case  the  company  points  out  the  counter-agents 
which  remedy  the  trouble. 

No  officer  or  employee  is  permitted  to  have  a  pecuniar)-  interest  in  any  boiler  or 
boiler  appliance.  While  the  best  advice  is  given,  an  attitude  of  impartiality  towards 
the  trade  i.s  strictly  maintained. 

They  now  insure  about  sixty-two  thousand  boilers,  the  annual  explosions  aver- 
aging about  one  one-hundredth  of  one  per  cent.  The  imagination  alone  can  deal 
with  the  saving  of  life,  of  suffering,  and  of  property,  through  the  methods  which  have 
been  elaborated  and  introduced  to  the  world  by  a  company  which  might,  without 
violence  to  language,  be  classed  among  the  beneficent  institutions  of  the  country. 

Up  to  January  i,  1897,  the  company  had  returned  to  patrons  in  losses  paid  and 
cost  of  inspections,  nearly  $4,000,000.  During  the  year  i  S96,  gross  premiums  reached 
$910,054.34,  and  income  from  investments,  $84,422.30.  There  was  disbursed  in 
losses  only  $87,078. 1 1.  The  company  pays  out  a  great  deal  to  prevent  trouble,  and 
hence  comparatively  little  in  the  way  of  indemnity.  On  the  same  date  gross  assets, 
inclusive  of  the  capital  of  $500,000,  reached  $2,119,09669,  with  unadjusted  losses  of 
$10,885.  As  the  outgo  is  used  largely  to  defray  cost  of  inspection,  the  reser\'e 
($1,291,858)  may  be  regarded  from  the  standpoint  of  the  layman  as  technical  rather 
than  essential. 

It -should  be  borne  in  mind  that  the  expansive  force  of  steam  is  sufficient  to  rend 
any  boiler  in  use.  Hence  none  but  competent  engineers  should  be  employed.  Once 
in  a  while,  in  case  of  sudden  sickness  or  some  other  emergencv,  a  green  hand  is  put 
temporarily  in  charge,  and  from  this  cause  have  come  the  most  distressing  casualties 
that  have  occurred  under  the  policies  of  the  company. 

In  1873  the  company  moved  into  the  present  yEtna  Life  Insurance  building, 
where  its  rooms  are  equipped  with  all  scientific  appliances  for  the  conduct  of  the  busi- 
ness.     It  occupies  the  entire  second,  and  a  large  part  of  the  third  floor. 

The  history  of  this  company  is  also  the  stor^-  of  the  life-work  of  its  president, 
Jeremiah  Mervin  Allen.  Born  at  Enfield,  Conn.,  Alay  18,  1833,  of  a  lineage  wherein 
love  of  science  and  mechanics  has  been  hereditary,  his  earl 3- studies  and  predilections 
seemed  to  lead  up  directly  to  the  calling  which  fell  to  him  unsought.  While  a 
teacher  for  four,  and  a  fire  insurance  adjuster  for  two  years,  he  attended  to  his  duties 
with  a  fidelity  that  attracted  attention,  and  at  the  same  time  gave  his  leisure  to  study. 
When  Mr.  Allen  accepted  the  presidency  there  was  no  demand  for  the  policies  of  the 
company.  To  convince  steam  users  of  the  utility  of  the  system,  he  made  frequent 
and  arduous  journeys,  often  traveling  by  night,  and  using  honeyed  words  of  per- 
suasion by  day.  A  change,  complete  and  universal,  and  having  its  sources  in  this 
early  niissionar)'  work  has  since  taken  place.  Regular  inspections  are  now  regarded 
as  hardly  less  indispensable  than  fuel  and  water. 

Mr.  Allen's  methods  are  rigidly  scientific.  He  has  prepared  man)-  formulae  that 
express  with  mathematical  precision  tlie  rules  of  construction  and  criticism  constantly 
observed.  L,ove  of  their  chief,  born  of  fatherly  courtesy  and  kindness,  explains  in  good 
part  the  loyalty  of  employees  to  the  company. 

Outside  of  his  profession  Mr.  Allen  has  been  of  great  service  to  the  public  by 
his  skill  in  applying  scientific  principles  to  practical  affairs.  He  is  often  called  upon 
to  discover  hidden  causes  of  trouble  and  to  find  a  remedy.  He  has  written  much  and 
delivered  many  addresses  on  scientific  subjects.     He  holds  many  positions  of  trust. 


.ecvcv.-^^' 


^^  ytl.f''^^. 


'"^''hn. 


J.  M.  ALLEN', 
President. 


■•-uitor  "  r 


THE  HARTFORD  STEAM    BOILER   INSPECTION  AND_  INSURANCE   CO. 


INSURANCE    IN   CONNECTICUT.  117 

When  the  Hartford  Board  of  Trade  was  organized  in  1888,  Mr.  Allen  was  elected 
president,  and  by  public  importunity  has  been  almost  forced  to  retain  tlie  position 
ever  since.  Towards  its  n.sefulness  in  promoting  the  solid  growth  of  the  city  his 
tact  aud  judgment  have  very  largely  contributed. 

The  office  of  first  vice-president  is  honorary,  its  incumbent  not  belonging  to 
the  active  force.  It  is  filled  by  Gen.  William  B.  Franklin,  late  of  the.  United 
States  Army. 

Francis  Burke  Allen,  second  vice-president,  was  born  in  Baltimore,  Rid.,  June 
I,  1S41  ;  served  the  Illinois  Central  Railroad  in  the  department  of  mechanical  engi- 
neering, 1857-1861  ;  served  as  an  officer  in  the  engineer  corps  of  the  United  States 
Navy,  1862-1S68;  resigned  in  1868  to  become  foreman  of  the  Novelty  Iron  Works 
of  New  York  ;  in  1871  accepted  the  position  of  assistant  to  the  superintendent  of 
motive  power  on  the  Northern  Pacific  Railway;  in  1872  entered  this  company  as 
special  agent  in  the  New  York  department;  in  1882  was  invited  to  Hartford  as  super- 
vising general  agent,  and  in  1887  was  made  second  vice-president.  Incidentally  he 
has  been  a  leading  spirit  in  various  military'  and  naval  associations. 

Joseph  Bancroft  Pierce,  secretary,  was  born  in  Thomaston,  Conn.,  October  13, 
1835,  and  after  a  short  experience  in  manufacturing  entered  the  in.surance  field  in 
Hartford  in  1S60  as  bookkeeper  for  the  North  American  Fire,  with  which  he 
remained  as  general  agent,  adju.ster,  assistant  secretary  and  secretary  till  its  extinc- 
tion in  the  Chicago  fire  of  1871.  He  then  became  general  agent  of  the  National  Fire 
of  Hartford,  and  in  March,  1873,  secretary  aud  treasurer  of  the  Steam  Boiler  Inspec- 
tion and  Insurance  Company,  where  he  has  since  remained. 

L>'man  Bushnell  Braiuard,  assistant  treasurer,  was  born  March  27,  1856,  in  West- 
chester, Conn.,  and  at  the  age  of  twenty  began  to  acquire  experience  in  insurance  as 
a  canvasser.  For  a  year  from  April,  1878,  he  solicited  for  the  State  Mutual  of  Hart- 
ford, giving  np  the  position  to  become  general  agent  and  adjuster  for  the  Jersey  Cit\-, 
with  which  he  continued  till  August,  1S86,  when  he  accepted  a  more  lucrative  posi- 
tion with  the  Equitable  Mortgage  Company  of  New  York  city,  which  he  served  as 
secretarv  and  head  of  the  bond  department.  He  resigned  March  2,  1894,  to  take  his 
present  place. 

INSURANCE   IN  CONNECTICUT   LOCALIZED. 

\\'ith  the  exception  of  a  few  scattered  mutual  fire  companies  the  business  of 
iilsurance  in  Connecticut  is  now  almost  confined  to  Hartford.  From  time  to  time 
about  one  hundred  and  thirty  separate  institutions  have  received  charters  from  the 
General  Assembly  of  the  state  giving  authority  to  engage  in  various  forms  of  under- 
writing. Many  tried  the  experiment  and  failed.  Not  only  large  fires,  but  long 
periods  of  mercantile  depression  have  brought  great  fatality. 

In  Hartford  towards  the  close  of  the  eighteenth  century  a  number  of  leading 
merchants  and  others,  with  the  \ie\v  ])riinarily  of  protecting  vessels  and  cargoes  sail- 
ing from  the  river  towns  to  the  West  Indies,  undertook  the  work  in  constantly  changing 
partnerships.  In  1803  they  formed  a  chartered  company,  which,  tiiough  prosperous 
at  first,  withered  during  the  Napoleonic  wars  and  the  War  of  1812.  While  this  ven- 
ture was  still  struggling  with  perils  of  the  sea  the  Hartford  and  the  /Etna  took  up 
the  work  on  land.  Success  attracted  others.  A  profession  was  graduall)'  formed  to 
discover  correct  theories  to  which  practice  ma\-,  in  the  long  run,  safely  be  made  to 
conform. 

Here  leadership  has  been  gained,  not  b\-  luck  or  accident  or  favoring  circum- 
stances, but  by  profound  stud\-  of  the  facts  and  principles  invol\-ed  in  the  business, 
by  high  native  intelligence,  sharpened  to  a  keen  edge  in  frequent  adversities,  by 


118  INSURANCE   IN    CONNECTICUT. 

patient  endurance  through  periods  of  misfortune,  by  heroic  courage  in  meeting 
exceptional  calamities,  and  not  least  by  scrupulous  integrity  in  dealings  with  the 
public. 

The  business,  too,  is  conducted  in  a  cosmopolitan  spirit.  Present  managers  have 
won  their  places  not  through  favoritism  or  inherited  influence,  but  through  merit 
alone.  Ability,  character,  technical  skill,  special  gifts  are  welcomed  from  every 
quarter.  The  sketches  above  given  show  the  breadth  of  area  and  the  wealth  of  ex- 
perience now  brotrght  together  in  the  different  offices  of  the  city.  In  a  word,  con- 
spicuous success  has  been  won  by  intelligence  and  integrity.  The  decisive  way  in 
which  occasional  lapses  from  rectitude  have  been  treated  emphasizes  the  general 
truth  by  ^'ividlless  of  contrast. 

STATE   COMMISSIONERS. 
The  office  of  commissioner  of  insurance  was  created  by  a  law  passed  in   1865, 
but  singularly  enough  his  duties  were  defined  by  a  law  enacted  in   1S64.     The  de- 
jjartment  was  not  established  till  1871. 

COMJIISSIOXERS.  TERMS  OF  SERVICE.  COMMISSIONERS.  TERMS  OF  SERVICE. 


Orsamus  R.  Fyler 1886-1893 

*JohuS.  vSeymour      1S93- 

Burton  INIansfield 1893-1895 

Frederick  A.  Belts 1895- 


Benjamin  Noyes 1865-1871 

George  S.  IMiiler 1871-1874 

John  \V.  Stediiian 1S74-1880 

John  \V.  Brooks 1880- 1883 

Ephrahn  Williams 1883-1S86 

*  John  S.  Sej'niour  held  the  office  from  March  4th  to  .\pril  i  ith,  1893,  when  he  resigned  to  take 
the  office  of  commissioner  of  patents  at  Washington. 

POSTSCRIPT,  JULY    ist,    1897. 

^TNA  Insur.\nce  Company. — The  foregoing  history  was  brought  down  to 
February,  1897.  During  the  interval  several  important  changes  have  taken  place. 
March  19th  James  F.  Dudley,  vice-president  of  the  ^-Etna  Insurance  Company, 
while  absent  on  a  business  trip,  died  suddenly  of  apoplex>-  at  New  Orleans.  April 
7th  E.  O.  Weeks  was  promoted  to  the  vice-presidency  and  A.  C.  Adams  and  Henry 
E.  Rees  were  elected  assistant  secretaries.  Mr.  Adams  was  born  in  Barnstable, 
Mass.,  April  9,  1847.  He  entered  upon  insurance  work  in  1865,  and  since  1891  has 
been  special  agent  of  the  yEtna  in  the  New  England  field.  Mr.  Rees  was  born  in 
Macon,  Georgia,  April  29,  1857,  and  has  been  engaged  in  insurance  since  1881,  hav- 
ing served  as  special  agent  of  the  ^tna  at  the  south  since  1889.  F.  C.  Bennett, 
general  agent  of  the  Western  Branch  office  at  Cincinnati,  Ohio,  since  1870,  died 
May  25  th,  aged  sixty-seven.  N.  E.  Keeler,  the  a.ssistant  general  agent  and  Thomas 
E.  Gallagher,  a  valued  special  agent  of  the  company  in  New  York,  have  been  ap- 
pointed to  fill  the  vacancy  under  the  firm-name  of  Keeler  &  Gallagher.  President 
William  B.  Clark,  having  served  as  president  also  of  the  National  Board  of  Under- 
writers, in  May  declined  a  re-election  to  that  honorable  position,  owing  to  pressure 
of  duties  connected  with  his  own  company. 

Hartford  Life  Insur.^nce  Company. — At  tlie  last  session  of  the  Connec- 
ticut Legislature  the  name  of  the  Hartford  Life  and  Annuity  Insurance  Company 
was  changed  to  the  Hartford  Life  Insurance  Company. 


INJIRX 


I'Ai-.E 

A  BBdT,  William  G (iti 

^^     AckU'v,  Elijiih fiO 

Adams,  A.  C -    ...     IIS 

.■Vtlains,  Chester Kl-I 

.\rlams.  Penias IS 

.Aclims,  Jolin  T 11 

jKtiKi  Insiiiaiice  Company  ■ 

Why  started,  22;  organization,  22;  modest 
heginnings,  23;  Henry  L.  Ellsworlli,  23;  re- 
insurance of  the  Middletown  Fire  Insurance 
(Jninpany,  23;  labors  and  vigilance  of  directors 
23 ;  extension  of  tlie  agency  system,  2-t ;  a 
c.uitions  secretary,  24  ;  sore  trials  overcome 
lij-  conrage  of  direclors,  24;  companies  saved 


bv  united  action. 


Isaac  Perkins,  25  ;   fire 


losses  a  gauge  of  general  conditions,  25 ;  panic 
of  1837,  25;  trip  of  the  president,  26;  first 
fire  policy  in  Chicago,  2(i ;  travels  of  directors, 
26;  .Toseph,  Junius  S.,  and  J.  Pierpont  Mor- 
gan, 26  ;  inland  insurance,  26  ;  fire  of  1845  in 
New  York  City,  27  ;  turning  the  half  century, 
27;  business  fr.ni  the  Protection,  27;  rajiid 
growth,  28;  increases  of  capital,  28;  Thomas 
K.  Brace,  28;  Edwin  (i.  Kipley,  28  ;  Thomas 
A.  Alexander,  29  :  contest  over  re-insurance 
reserves,  29  ;  cla.ssification  of  losses,  29  ;  first 
chromo  poster,  29;  introduction  of  outline 
charts,  29;  in  1819  a  book  of  instructions,  30; 
losses  at  Chicago,  30  ;  Lucius  J.  Hendee,  30 ; 
Jotham  (^ioodnow,  30;  E.  J.  Bas.sett,  31; 
A.  C.  Bavne.  31;  William  B.  Clark,  31; 
James  F.  Dudley,  31  ;  William  H.  King,  31  ; 
Egbert O.  Weeks,  31 ;  assets,  32;  A.  C.Adams, 
118;  H.  E.  Rees,  118. 
j'Etua  Life  Insurance  Company: 

Origin,  90  ;  first  directors,  90;  early  develop- 
ment slow,  90  ;  war  stimulus  causes  rapid 
growth,  91  ;  productive  investments,  91  ;  farm 
loans,  91  ;  large  returns  to  policy-holders,  91  ; 
increa.ses  of  capital,  92;  Eliphalet  A.  Bulke- 
lev,  92;  Thomas  ().  Endeis,  92;  IMorgan  G. 
Hidkeley,  93;  officers,  93  ;  statistics,  93 ;  acci- 
dent department.  93;  John  ('.  Webster,  93; 
Joel  L.  English,  93  ;  Howell  W.  St.  John,  94  ; 
Charles  E.  (iilbcrt,  04  ;   home  office,  94. 

.Alcott,  Samuel 3 

Alexander,  David 18 

Alexander,  Thomas  A 29 

Allen,  Francis  B.,  Sketch  of 117 

Allen,  J.  M 87,112,11.3,114,115,117 

Sketch  of 116 

Allen,  Stephens  &  Companv 84 

Allyn,  T.  C .' 18,21 

Alsop,  Joseph 8 

Alsop,  Kichard 3 

American  Mutual  Life  &  .\merican  National  Life 
and  Trust  Company  of  New  Haven  : 
Formation  and  first  officers,  69  ;  incorrect  and 


fatal  assumptions  respecting  rates  of  interest 
and  mortality,  70;  connnissioner  Eli/.ur 
Wright  puzzled  70;  high  character  of  Presi- 
dent Sillim.-in,  70,  71  ;  Kenjamin  Noyes,  pre- 
sident, 70  ;  also  insurance  connnissioner,  71; 
a  prophet  more  honored  at  home  than  abroad, 
71  ;  a  faithful  trustee  banished,  71 ;  swapping 
scrip,  71  ;  an  attack  from  Norwich,  72  ;  a  new 
charter,  72  ;  legislative  stupidity  or  criminal- 
ity'.'  72;  long  gestiitiou,  72;  change  in  name 
oidy,  73;  action  of  new  commissioner,  73  ;  re- 
insurance of  National  Life  of  iS'ew  York,  73; 
a  bad  bargain  .'infl  uue.xiiccted  obstacles,  73; 
.John  W.  Stediiian,  insurance  commissioner, 
assailed  by  complaints,  73 ;  his  examination 
and  its  discoveries,  73;  application  for  ap- 
pointment of  trustee,  74;  fle.xible  decision  of 
court,  74;  a  "guaranty  capital"  of  words 
only,  74  ;  securities  mostly  mythical,  75;  im- 
conscirius  share-holdei-s,  75  ;  phantoms  treated 
as  realities,  75;  report  of  connnissioner  to  the 
General  Assembly  and  reply  of  directors,  76; 
action  of  the  legislature,  76  ;  sudden  conver- 
sions, 76;  plain  talk  from  connnissioner,  77; 
over  $27,000  for  the  lobby,  77;  second  trial 
and  miscarriage,  77  ;  a  vanishing  bank  credit, 
77;  plotting  a  flank  movement,  77;  purchase 
of  a  Washington  charter,  78  ;  dark  seances, 
78 ;  borrowed  bonds,  78 ;  born  again,  78 ; 
re  insurance  of  a  New  Jersey  company,  79; 
'Mersey  justice,"  79;  appointment  of  re- 
ceiver, 80;  .scant  assets,  80;  Noyes  in  prison, 
80;  triumphant  return,  80;  darkness  at  the 
end,  81. 
Atlas  Insurance  Company,  Hartford  : 
Succeeds  the  Charter  Oak  and  retires  after  a  strug- 
gle of  eight  years 57 

Averill,  Eliphalet  '. 33 

Ayrault,  James 63 

T3ACKUS,  Asa 11 

Backus,   Joseph 60 

Baker.  William  E 36 

Baldwin,  Simeon 11.21 

Baldwin,  Simeon   E 74 

Ball,  Stephen 104, 105 

Barnes,  .Tonathau,  Jr ...       22 

Barnes,  William (io.  96 

Barrows,  Edwin  G 110 

Bartholomew,  George  M 88,89 

Bassett,   Erastus  J 31 

Batterson,  James  G., 50,  106,107,108 

Sketch  of 110 

Bayne,  Andrew  C 30,  31 

Beecher,  Robert  E 99 

Belden,  H.  K 21 

Bennett,  F.  C 32,35,118 

Itennett,  J.  B 35 

119 


120 


INDEX. 


Page 
Bennett,  Martin 38, 39 

Foreign  agencies 57 

Slvetch  of 57 

Beresford,  Samuel  B 82 

Betts,  Frederick  A 118 

Bill,  Elijiili  A 60  1 

Billings,   Coddiugton 8 

Bishop,  J.  A 75 

Bissell,  George  F IS 

Bissell,  George  1* 87 

Bliss,  Lewis 15 

Boardman,  H.  F 60 

Boardraan  &  Spencer .      3'.^ 

Bodwell,  George  B.   .    . 5i' 

BoUes,    Armin 5vt 

Bolles,  James  G. 16,  20,  54 

Bombaugh,  C.  C Ill 

Bowers,  Caleb  B 21,  30,  54 

Bowers,  William  N 54 

Brace,    .Tonathan ....  .        6 

Brace,  Thomas  K 1 2,  23,  26,  27 

Sketch  of 28 

Brainard,  Leverett 36 

Braiuard,  Lyman  B 117 

Breed,  Shubael 12 

Brewster,  Augustus 12 

Brewster,  Augustus  0 12 

Brewster,  James  H 57 

Sketch  of 57 

Bridge|iort  Fire  and  Marine  Insurance  Company : 
Organization,  36;  exclusion  from  New  York, 

36  ;  padding  assets,  36  ;  a  frightened  director, 

37  ;  insolvency,  37  ;  officers,  37. 

Bristol,    Willis 36,  48,  70,  72 

Brooks,  Isaac 89 

Brooks,  John  VV 55-118 

Browne,  John  D 21 

Sketch   of 39 

Buck,  Daniel 12 

Buck,  Daniel 54 

Bnck,  John   K 88-101 

Bulkelev,  Eliphalet  A 63-90 

S'ketch   of        92 

Bulkelev,  Morgan   G 9-' 

Sketch   of 92 

Bulkeley,  William  H 93 

Bull,  Michael  and  Thomas 3 

Sketch   of 6 

Buiice,  Edward  M 66 

Sketch  of 69 

Bunce,  Jonathan    B 89,  96,  97 

Sketch  of 98 

Bunce,  .lohn  L 82 

Burdick,  George  H 42-43 

Sketch  of 44 

Burns,  James   1<" 9.5-96 

Burt,  Charles  K 38,  39 

Sketch  of 40 

Bushnell,  Cornelius  S 47 

Buswell,   John 12 

r^ALDWELL,  John      2,  .3,  5,  6,  7,  3  1 

^     Sketch   of 4 

Cilhoun,  Philo  C 37 

Callingliam,  W.  J.                      56 

Camp,  John  N.  .    .    .            60 

Camp,  William  S 60 

Campbell,  James 93 

Cannon,  llenry  L 37 


Page 

Carter,  Buswell 77 

Catlin,  Julius 60 

('hadwick,  Daniel 88 

ChamVierlin,  A 56 

Charter  Oak  Fire  and  Marine  Insurance  Company : 
Formation,  52;  chronic  impairment,  52;  re- 
duction of  capital,  52;  destruction  by  Chicago 
fire,  52;  officei-s,  52. 
Charter  Oak  Life  Insurance  Company: 

Charter  requirements,  82;  large  over-sub- 
script on,  82;  first  directoi-s  and  officers,  82; 
Gideon  Welles,  82;  stock  notes,  82;  early 
officers,  83;  votes  for  the  eyes  of  examiners, 
83 ;  good  agents  outside,  bad  management 
inside,  83  ;  warning  from  Commissioner  Sted- 
mau,  84;  failure  of  Allen,  Stephens  &  Co., 
84;  building  a  railway,  a  sununer  hotel,  a 
costly  office,  etc.,  84;  Henry  J.  Knrber,  84; 
bis  contract,  85;  reorganization,  85  ;  discov- 
eries of  experts,  85;  Furber's  fertility  of  re- 
source and  advantageous  purchases,  86;  dis- 
trust of  Fnrber,  86  ;  a  special  commission,  86; 
in  the  courts  and  another  reorganization,  87; 
Marshall  Jewell  president,  and  departure  of 
Furber,  87;  investigations,  87;  liabilities 
scaled,  88;  reorganization  on  nmtual  basis, 
88;  trial  for  conspiracy,  88  ;  secret  contracts, 
88;  George  M.  Bartholomew,  president,  88 ; 
large  reduction  of  liabilities,  but  hopele.ssuess 
of  the  case,  88;  appointment  of  receivers, 89; 
final  distribution,  89. 

Chase,  Charles  E 21 

Chase,  Edwin  S.     . 69 

Chase,  George  L 18 

Sketch  of 18 

Chatfield,  H.  W 37 

Cheuevard,  John        3 

Sketch  of 6 

Chew,  Colby 8 

City  Fire  Insurance  Company  (Hartford): 

Changes   of    name   and    policy,   36 ;    careful 
management   and    prosperity,  36;    destroyed 
by  Chicago  fire,  36  ;  officers,  36. 
City  Insurance  Company  (New  Haven) : 

Early  pi-osperity,  37;  turn  of  the  tide,  37; 
retirement  after  the  Civil  War,  37  ;  revival 
after  long  dormancv,  37;  se(«)nd  retirement, 
37. 

Clanett,  William  H 78,  79 

Clark,  Daniel   W 33,  34 

Clark,  Joseph  N 36 

Clark,  L.  W 39,  56 

Clark,  Willi.am  B 28,30,42,118 

Sketch  of 31 

Cleveland,  II.  M 86 

Coffin,  O.  Vincent 60 

Cofran  &  Bissell 21 

Coit,  George  M 21 

Coit,  Samuel 82, 93 

Colt,  David 8 

Commissioners'  insurance,  of  Co:;necticut    ...     118 

Comstock,  Frederick  R 105 

Condict,  II.  I).    .        ;W 

Connecticut  Fire  Insurance  Company: 

Org.anization  and  first  directors,  37;  cautious 
policy,  38;  extinguishment  of  stock  notes, 
38;  Benj;miin  W.  Greene,  38;  John  B. 
Eldredge,  38;  heavy  losses  in  the  Chicago 
fire,  38;  charter  saved,  39;  good  fortune  fol- 
lowing, 39;    increase   of  capilal,  39;   J.  D. 


INDEX. 


121 


Ilrowne,  o9;    home   office,    39;    sUilislics   of 
giowlh,    40;    Charles    K.    Jiiiit,    40;    l>.    \V. 
Clark,  40. 
Connicticiit  (ienoral  Life  lusnrance  Coinpaiiv: 
Insurance  of   impaired    lives,    101  ;    clianges 
of   capital,    lO'J;    lii'st  liirectors  anil  ollieers, 
lOL';  sliriiika;;e  after  llie  panic,  102;   in  ISTll 
permanent   turn,    102;  T(nnine  policies,  Hl'J; 
Tliomas  \V.  Kussell,  10:1;  a  uotalile  Kancpiet, 
103;    statistics,  103;    Frederick    \'.    Hudson, 
103;     Kd»ard     B.     Peck,    103;     Kol.ert    \V. 
Huntington,  103. 
Connecticut  Health  Insurance  Company  ; 

Health   insurance  a   failure,  Si  ;     change  of 
name  and  aim.   81  ;  insurance  of  slaves  and 
coolies,  .SI ;  incurable  wounds,  81;  ollieers,  81, 
Connecticut  Mutual  Life  Insurance  Company ; 

Local  studies  in  insurance  half  a  century  ago, 
ti2;  a  charter  regardful  of  all  rights,  ti2; 
organization  and  first  directors,  t>3 ;  guaran- 
tee fund  provided,  tio  ;  dissensions  provoked 
by  economies,  (i3;  defeat  of  the  disati'ected, 
64;  new  directory  and  peace,  64;  retirement 
of  guarantee  notes,  (J4 ;  situation  in  1.S61, 
64  ;  the  premium  note,  64  ;  official  impertinence 
delied ,  6.5  ;  no  booty  for  blackmailers,  65  ;  equit- 
able distribution  of  savings,  6-5 ;  plots,  onset 
and  failure  of  land  speculators,  66  ;  Guy  K. 
Phelps,  66;  James  Goodwin,  66;  .successive 
officers,  66  ;  Jacob  L.  Greene,  67  ;  John  M. 
Taylor,  67 ;  conservative  methods  of  the  com- 
pany, 67  ;  discussion  and  action  in  regard  to 
fall  in  rates  of  interest,  67;  to  tontine  frauds, 
68;  statistics,  68;  Edward  M.  Bunce,  69; 
Daniel  H.  Wells,  69;  John  D.  Parker,  69. 

Connor,  William 21,  33 

Continental  Life  Insnr.,nce  Company: 

Organization,  99;  the  time  prolific  in  new 
life  insurance  companie.s,  99;  first  directors 
and  officers,  99  ;  revolution  with  change  of 
officers,  99 ;  how  sixty  per  cent,  of  capital 
was  reported  as  paid,  100;  examination  by 
special  commission,  100;  bewildering  confu- 
sion of  fictitious  credits,  100;  disappearance 
of  securities  loaued  to  plug  up  a  hole,  101  ; 
appointment  of  receivers,  101  ;  shrinkage  of 
assets,  101. 

Cook,  Howard  W 66 

Cooke,  Lorrin  A 101 

Cooper,  Samuel 60 

Courant,  The  Connecticut 6 

Courtuev,  Thomas  E 37 

Cowles,  "\V.  A 105 

Cowles,  E.  B 56 

Cowls,  Samuel 14 

Crosby,  E.  H 104,  105 

Cross,  Isaac 61 

T^AGGETT,  Alfred 48 

^-^     Danforth,  J.  W' 54 

Davis,  Gustavus  F 87, 107 

Davies,  J.  C 35 

Day,  Isaac  C 42 

Day,  Robert  E 54,  87, 89 

Denison,  Austin 8 

Denison,  Charles ...      21 

Denison,  Elihu  ...  8 

Denison,  John  L 12,  71 

Dennis,  Kodney 107 

Sketch  of  ." 110 


Devotiim,  John  L 61 

Dewell,  J.  D 55 

De  Witt,  J 61 

De  Witt,  John  H 61 

Diiksou,  Robert 40 

Dillon,  A.  H 85 

l)i.\on,  James 28 

Sketch  of 81 

Do.lge,  David  S 63,  64 

Doolittle,  Tilton   K 47 

Dornin,  George  I) 52 

Dorsheimer,  Gov 88 

Dnclos,  Henrv  P 104,  105 

Dudlev,  James  F 30, 118 

Sketch  of 31 

Dunham,  Austin 93 

Dunham,  Sylvester  C 112 

Douglass,  hrancis  D 99 

Dwight,  Timothy 8 


E 


I^ATON,  William  W. 
Eldredge,  John   P.. 
Sketch  of  .    .    . 


Ellis,  George  VV •      ,• 

Ellsworth,  Henry  L 23, 

Ellsworth.  Pincknev  W 

Ellsworth,  William' \V ' 

Sketch  of 

F^lmore,  Samuel  E 

Embargo  and  non-intercourse  acts 

English,  J.  L.,  sketch  of 

Enders,  Thomas  0 87 

Sketch  of 

Erving,  D.  D 

Erving,  K.  A 

Erving,  William  A 


38 

39 

111 

110 

109 

61 

32 
99 
9 
93 
,  93 
92 
60 
60 
60 

93 


TTAXON,  Walter  C 

-■-        Fay,  A.  Goodrich 78 

Fessenden,  Edson 95,  96 

Fillmore,  C.  J 61 

Fisher,  .\ugustus  F 59 

Flower,  Ebenezer 64,  66 

Foote,  John  P 33 

Foreign  trade  of  Connecticut 9 

Foster,  E.  K 46,  47 

Foster,  Frederick  K 105 

Foster,  L.  F.  S 77,  88 

Franklin,  William  B 50 

French,  B.  W 56 

Furber,  Henrv  J 84,85,86.87,88 

Fyler,  Orsamus  R 101,118 


44 
l.S 
36 
59 


p  ALACAR,  Ch  irles  E 

^^      Gallagher,  Thos.  E 1 

Galpiu,  Philip  S 

Galpin,John 

Glea.son  &  Cowles •  3 

Gilbert,  Charles  E 93 

Sketch  of 94 

Gill,  A 82 

Gill,  Ellas 83 

Gillett,  Ralph 36,  52 

Sketch  of 61 

Glover,  Thomas 1^ 

Goodman,  Aaron  C 90,  97 

Goodnow,  Jotham ...  31 

Sketch  of 30 

Goodrich,  Elizur H 


122 


INDEX. 


Page 
(ioodwin.  James 63,  04 

8ketcli  of 6(i 

Goodwin,  James  J 26 

(Toodwin,  Jaines  L 33 

Goodwin,  James  M 25 

Goodwin,  Jonathan,  Jr 28 

Grant,  David 59,  tiO 

Green,  Natlianiel 37 

Greene,  Fienjainiii  \V.,  .Sketeli  of 38 

Greene,  Jacob  I G6 

Sketch  of 67 

Greenslit,  David 59 

Griffiug.  John  S 36 

Griswold,  Wareham 104 

Gross,  Charles  £ 89-97 

TTAMERSLEY,  William 88 

Hammond,  Asael 59 

Hale,  Benjamin  E 94,  95 

Harris,  C.'  VV 60 

Harrison,  Justns S,  36 

Harrison,  Henry  B 74 

Harrison,  Lvnde 76 

Hartford  Bank 1,6,  13,  15,  16,  17,  19,  59. 

Hartford  County  Mutual  Fire  Insurance  Company  : 
Limit  of  operations  and  premium  note,  59; 
modest  start,  59 ;  in  1S42  a  crisis  safely  met, 
59;  etlects  upon  it  of  Chicago  tire,  59;  busi- 
ness confined  to  Connecticut  and  to  safer  class 
of  risks,  60;  officers,  60. 
Hartford  Insurance  Company  (Marine) : 

In  1,S03  organized,  6;    merger  in  the  Protec- 
tion, 7,  10,  32. 
Hartford  Fire  Insurance  Company: 

Organization,  12;  difficulty  of  investing,  12; 
first  purchase,  lo  ;  laws  of  average,  13  ;  capri- 
cious rates,  13;  character  and  care,  l-'S;  pay 
of  agents,  14;  spirit  of  Puritanism,  14;  slow 
growth,  14;causes,  14;  indemnity  for  losses  the 
primary  object,  14;  novelties  unpopular,  14; 
planting  early  agencies,  14;  who,  not  where? 
15;  gratuities,  15;  city  watch,  15;  re-insu- 
rauce  of  the  New  Haven  Fire  Insurance  Com- 
pany, 15;  salary  of  officers,  15;  first  clerk, 
15;  income  and  outgo,  15;  impairment  15; 
paying  losses  by  loans  15  ;  in  early  days  no 
reserves  laid  by,  16  ;  Eliplialet  succeeds  Na- 
tlianiel Terry,  16  ;  meeting  a  crisis,  16  ;  re- 
ward of  courage,  16  ;  extraordinary  losses, 
17  ;  action  of  directors,  17  ;  increases  of  cap- 
ital, 17;  Hezekiah  Huntington,  17;  T,  C. 
Allen,  18;  George  L.  Chase,  18;  a  more  ag- 
gressive policy,  18 ;  new  departments,  18;  the 
great  Chicago  fire,  IS;  the  Boston  fire,  19; 
President  Chase  and  the  Ocean  Bank  of  New 
York,  19 ;  successive  offices,  20 ;  present 
building,  20;  small  stock  liability,  20;  secre- 
taries, 21;  P.  C.  Royce,  21;  Tliom.as  Turn- 
bull,  21  ;  Charles  E.Chase,  21;  departments, 
21 ;  large  assets,  2 1 . 
Hartford  Life  and  Annuity  (now  Hartford  Life) : 
Chartered  to  do  accident  as  well  as  life  in- 
snrance,  103  ;  first  directors  and  officers,  103  ; 
changes  of  name  and  abandonment  of  acci- 
dent feature,  104 ;  impairment  of  capital,  104  ; 
recovery  under  the  presidency  of  C.  C.  Kim- 
ball, 104 ;  after  changes,  104 ;  scheme  of 
Henry  P.  Duclos,  104;  presidents,  105;  sta- 
tistics, 105;  Kienzi  B.  Parker,  105;  Stephen 
Ball,  105;  home  office,  105;  name  changed,  118. 


Hartford  and  New  Haven  Insurance  Company,  2, 

3,  5,  32, 
Hartford  Steam  Boiler  Inspection  and  Insurance 
Company  : 
Transition  from  water  to  steam  power,  112  ; 
frequency  of  casualties,  112;  the  Polytechnic 
chil>,  112;  fii'st  directors  and  organization, 
113;  lack  of  faith  with  failure  imminent, 
113;  J.  M.  Allen  accepts  the  presidency, 
114;  his  tact  and  carefulness,  114;  rapid  and 
solid  growth,  114  ;  Tin:  Loeuniotu'e,  115  ;  aims, 
cure  of  defects  and  prevention  of  disaster,  115; 
magnitude  of  the  work,  115;  home  office  a 
bureau  of  scientific  information,  115;  furnish- 
ing plans  for  steam  plams,  115;  responses  to 
scientific  tests,  115;  chemical  laboratory, 
116  ;  impartiality  tow.ird  the  trade,  116  ;  sta- 
tistics, 116;  J."  M.  Allen,  116;  (ieneral 
William  B.  Franklin,  117:  Francis  B,  Allen, 
117;  Joseph  B.  Pierce,  117;  Lyman  B, 
Brainard,  117. 

Hartford,  supremacy  in  underwriting 4,  117 

Hastings,  A.  F 54 

Hastings,  W.  C 54 

Hatch,  George  E 87 

Havens,  Waller  H. 60 

Hayden,  H.  H 113 

Hazard,  Augustus  G 27,29 

Hendee,  Lucius  J 99 

Sketch  of 30 

Hill,  W,  H 95 

Holcorabe,  James  H 95 

Holcombe,  John  M 87,  96,  97 

Sketch  of 98 

Hollister,  Nelson 85 

Homans,  Shep;ird 65 

Home  Insurance  Company  (  New  Haven). 
Formation,  53  ;  capital  increased  to  one  million, 
53  ;  dividends  from  capital,  53  ;  reckless  zeal, 
53;  reduction  to  one-half  million,  53;  bank- 
ruptcy, 53;  indignation  of  Commissioner 
Noyes,  53. 

Hooker  i!i:  Brewster 14 

Hooker  i>i  Chaffee      3 

Hooker,  William  T ...    63,81 

Hopkins,  Dan 3 

Hough,  Timothy 37 

Howard,  James  L 61,  62 

Howard,  Mark,  courage  and  foresight  .    34,  3.3,  49,  52 

Sketch  of '. 50 

Howe,  Edmund  G.        67 

Howe,  William 3 

Hovt,  John   W 60 

Hnblia.d,  Elijah         22 

Hubbard,  George  W 93 

Hubbard,  Gurdon    S.     .    . 26 

Hubbard,  Richard  D 50,  109 

Hubbard,  Thomas 22 

Hudson,  B 52,  94 

Hudson,  Frederick  V 102 

Sketch   of 103 

Hudson  i  Goodwin 3 

Sketch  of 6 

Hudson,  Henry 12 

Huntington,  Charles  P 12 

Huntington,  Ebenezer .    .       12 

Huntington,  Edward  B 57 

Huntington,  Hezekiah;  Sketch  of 17 

Huntington,  John  G 12 

Huutiugton,  Levi 11 


ixn/ix. 


123 


Pali 

lliiiitini;tiiM,  HiclKiril (iO 

]:liintiii;;toii,  Kobt'lt  \V 103 

IluiiliiiiLtton,   Zachariah 11 

Ilv.le.  A.  P 88 

n'yi\v,  l.owis IL' 


I 


Ml.AV.  Willi; 


.liov 


2,  30,  43 


[  AMES,  Fred.  S. 
"      Jeiiness,  F.  AV. 


.lewelK  Marshall ii, 

.Icnetl,  (ieoiTje  D 

.lillsou.    Awl 

Sketi'h  of 

Jolinsoii,  Klisliu 76, 

Johnson,  Hobert   A.  .    .  

Jones,  Daniel 


31 

87 

0-1 

42 
43 

87 

54 

3 


ir^EELER,  N.  E.  .  .  .  .  118 
-•-^     Kellogg,   Henrv 40, 41 

Sketfh  of  .    .   ". 43 

Kimball,  C.  C 104 

King,  llezeUiali 33 

King,  William  H 30 

Sketch  of 31 

Kingsbnrv,   Eplirairn         14 

Kinney,  J.  W.    ...  11 

Knox,  Jolni 3 

Knox,  John  B 44 

Knox.  Norniantl 3,  6,  7 

T  AMB,  Jo.^eph  (J 71 

-'-'      Eaw,  Kichanl 8 

Lawrence,  Charles  11.  .    .                 97 

Sketch  of 99 

Lawrence.  Sanuiel 3 

Lathrop,  Bnrrel 11 

Lathrop,  Tlioma,< 12 

Learned,   Ebenezer,  Jr 12 

Learned,  Joshna  C 8 

Leavitt,    Hooker 14 

Lee.  William  T 82 

Leete,  Charles  S Sti 

Lewis,  H.  (i 75 

Lewis,  John  B.;  Sketch  of Ill 

Lewis,  William 36 

Lester,  George  S 55 

Lester,  (ieorge  W .    .    .  3t),  55,  56 

Life  Insurance,  beginnings  of 61 

"         "     Denounced  bv  Elder  Swan 62 

Lobdell,  E.  Thomas  .    .  ' 49  ! 

Loomis,  Simeon  L 25,26,41,42.93  ' 

Lyman,  C.  C. ....    16,  21 

Lvnde,  John  H 21 

Lyon,  K.  F 72 

Lyon,  William 8 

A/TACK,  Samuel  E 35,  41 

^^^    Magill,  H.M 35,44 

Magill,  R.  H 41,  44 

Maltby,  C.  S 75 

Planning,  W.  S 104 

JMansficld,  Burton 118 

Marcy,  Tlionias  K 86 

Marine  Insurance  (earlv) 3 

Mason,  E.  J.    .    .    .    .  " 37 

Mason,  James  M 37 

Mason,  H.    .    .        36,  37 


PAr.E 

Matthews,  Edward 86 

MacFarlane,  John  J 96,97 

.Merchants'  Fire  Insurance  Co.  (See  National)     . 
Meriilen  Insurance  ('omi)any: 

llelirement  after  a  fairly  succe.ssful  career,  56. 

Merrilt,  ( leorge  S 57 

Mcrwin,  S.  E 53 

iliddletowii  Insurance  Company 7,8 

lieinsured 22 

.Mi<ldlesex  .Mutual  .Vssnrance  Company  : 

Largest  of  state  nuituals,  60;    methods  and 

progress,  60  ;  otficers,  60. 

.Miller,  Asher 8 

Miller,  George  S 72,118 

Miller,  Henry  L 81 

Milligan,    Kd'ward 44 

Miscellaneous  insurance 100 

Mitchell,  J.  C 35 

Mitchell,  J.  H 44 

.Mitchell,  Walter 12,  15,  16,  22 

.Morgan,  Forrest 110 

Morgan,  John 2,  3,  32 

Sketch  of 5 

Morgan,  Joseph 26,  66 

Morgan,  Junius  S 26,  66 

iMorgaii,  J.  Pierpoiit 26 

Morgan,  Nathaniel  II.,  sketch  of 41 

Morgan,  N.  D 64 

Morg;iu,  Samuel 12 

Morris,  John  E.,  sketch  of Ill 

Morris,  Luzon  B 48 

Mortimore,  J.  A 79 

Mutual  Assurance  Companv  of  the  Citv  of  Nor 

wich ■ ■  ...   11,  58 

Mutual  Assurance  Company  of  New  Haven  .    .    .      11 
Mutual  Insurance  Companies,  dates  of  incorpora 

tion  and  gross  assets  , 58 

"^  A  TION  A  L  Fi  re  Insurance  Company  (successor 
"^         to  Merchants')  : 

Organization  and  first  directors  of  the  Mer- 
chants', 49;  experience  of  Mark  Howard, 
president,  49;  stock  fully  paid  in  cash.  49; 
overwhelmed  by  Chicago  tire,  49;  all  a.s.sets 
distributed  pro  rata,  50;  revival  in  the  Na- 
tional, 60;  first  directors,  50  ;  Mark  Howard, 
50;  his  instruction  book,  51  ;  James  Nichols, 
51 ;  home  office,  52  ;  statistics  of  progress,  52; 
Ellis  G.  Eichards,  62;  Benjamin  E.  Stillman, 
52;  departments,  52. 
Naval  victories  won  by  sailors  trained  in  merchant 

marine 10 

Nevers,  George 52 

New  England  Fireand  .Marine  IiisuranceCompany: 

Formation,  struggles  and  death 54 

New  Haven  Fire  Insurance  Company  .    ,    .    .  3,  7,  15 

Keinsured 21 

New  London  Conntv  ilulual  insurance  Companv: 

Officers  .    .    .  ' "60,  61 

Nichols,  David  P 86 

Nichols,  James 49,  50 

Sketcli  of 51 

Niles,  John  M 102 

North  .\mericau  Fire  Insurance  Company: 

Organization,  53;  depletion  by  dividends  and 
death,  54;  officers,  54. 

Northrop.  Frederick  W 47,  48 

Norton   Ebenezer  F.  ...        14 

Norwalk  Marine  ami  I'ire  Insurance  Company  ; 

Sale  to  a  foreign  comp.-niy 54 


124 


INDEX. 


Norwich  Fire  Insurance  Company 7,  8,  10 

Sketcli  of ■ 11 

Noves,  Benjamin,  45,  47,  53,  69,  70,  71,  72,  73,  75,  7(i, 
77,  7S,  79,  80,  118. 


r)CEAN  Bank  receivership li) 

^     Ocean  Insuiance  Company,  of  New  Haven        N 

Orient  Fire  Insurance  Company  (Hartford)  : 

Successor  of  the  City  Fire  Insurance  Com- 
pany, 55 ;  organization  and  tirst  directors,  55; 
l^oston  tire,  55;  increases  of  capital,  55; 
Charles  B.  Whiting,  55;  panic  of  1893,  and 
its  eflects  on  insuiance,  56;  statistics,  56; 
officers,  56;  James  U.  Taintor,  56;  Howard 
W.  Cook,  56;  departments,  56. 

"DALMER,  James  C 59 

Palmer,  John ...       .^9 

Palmer,  Noves  S 83 

Park,  John' D 77 

Parker,  E.  F (;il 

Parker,  John  D 66 

Sketch  of 69 

Parker,  Reinzi  B.,  sketch  of 105 

Parsons,  Enoch 8 

Parsons,  Edward  W 102 

Parsons,  James  S 99, 101 

Parsons,  John  C 97 

Par.sons,  S.  (i 54 

Pa-ssing  the  hat 10 

Patten.  Nathaniel 12,  13 

Pearl,  William  M 1 10 

Peck,  Edward  B 103 

Perkins,  Charles  E 88 

Perkins,  George  L 12 

Perk  ns,  Isaac  .    .   .    .    , 23,  24 

Sketch  of 33 

Perkins,  Thomas  C 25,  32 

Sketch  of '33 

Perkins,  Tliomas  S 8 

Petei-son,  Charles 36 

Phillips,  Daniel 85 

Phelps,  Anson  G 15 

Phelfjs,  Elisha      59,60 

Phelps,  Guy  R 61,63,65,101 

Sketch   of 66 

Pliieui.x  Fire  Insurance  Company: 

.An  inspiration  of  Henry  Kellogg,  40;  organi- 
zation and  lirst  directors,  41 ;  Nathaniel  H. 
Morgan,  41;  agents  and  husiness  from  the 
Protection,  41 ;  occupation  of  the  Pacific 
coast,  41 ;  no  prolonged  infancy,  41 ;  in- 
creases of  cajiital,  42,  43;  payment  by  Mar- 
shall  Jewell  of  iirst  loss  after  Chicago  fire, 
42 ;  reaction  from  despair,  42 ;  forest  fires, 
43;  successive  rjuarte's,  43;  Henry  Kellogg, 
43;  D.  W.  C.  Skilton,  43;  J.  \\.  Mitchell, 
44;  statistics  of  growth,  44 ;  (t.  H.  Bnrdick, 
44;  Charles  E.  Galacar,  44  ;  Edward  .Alilli- 
gan,44;  John  B.  Kno.t,  44;  departments,  41. 
Phoenix  Mutual  Life  Insurance  Com|iany: 

Temperance  theories,  94 ;  organization  and 
fii-st  directors,  94  ;  adoption  of  regular  ]ilans, 
95;  early  officers,  94,  95;  panic  of  1873,  and 
excessive  returns  to  policyholders,  9"); 
change  of  policy  and  officers,  96 ;  .Aaron  ( '. 
(ioodman,  96;  repair  of  assets,  96;  ap]ie;ir- 
ance  of  John  J.  McFarlane,  96;  results.  97; 
by  retirement  of  stock   the  company   made 


Page 
mutual,  97;    statistics,   98;   new    office,    98; 
Jonathan  B.  Bnnce,  98;  John  M.  Holcombe, 
98;  Cliarles  11.  Lawreuce,  99 

Pierce,  J.  B ■    .    .    .    .      54 

Sketch  of 117 

Post,  Augustus  T 78 

Post-Revolutionary  poverty  and  isolation,  1 ;  ac- 
tivities, 1. 

Pratt,  Elisha  B 61,  63,  64 

Pratt,  Francis  k 112 

Pratt,  Henry  Z 31,  64 

Prentice.  .Amos 54 

Preston,  Edward  V.,  sketch  of Ill 

Preston,  Selden  C 55 

Preston,  Zephaniali 67 

Pi'otection  Insurance  Company  : 

Lineal  successor  of  the  early  underwriters  of 
Ilarlford,  7,  10;  fall  of  its  business  to  the 
^Etn,i  28 ;  inherits  a  stock  of  traditions  and 
gnod-will,  32;  first  directors,  32;  William 
AV.  Ellsworth,  32;  Thomas  C.  Perkins,  33; 
work  of  Ephraim  Kobuins,  33;  his  success, 
33;  Cincinnati  office  a  club  room  of  whig 
chiefs,  33  ;  Mark  Howard,  first  special  agent, 
34  ;  profits  scattered  in  dividends,  34  ;  St. 
Louis  fire,  34  ;  a  spicy  interview,  34  ;  a  con- 
stricted treasury,  34 ;  struggles  and  collapse, 
35;  lessons  from  the  failure,  35;  residuary 
legatees,  35. 
Putn-.im  Fire  Insurance  Company  : 

Intestine  war,  54;  unjustifiable  presumptions, 
54;  general  mismanagement,  54;  struggles 
and  destruction  by  Chicago  fire,  55. 

QUINNIPIAC      Insm-ance      Conipanv     (New 
Haven  : 
Return    of   capital    to   shareholders   and    re- 
tirement, 55. 

"RANSOM,  Amos 12 

^^    Redfield,  S.  B 8 

Rees,  Henrv  E 118 

Rice,  John's 99 

Kice,  O.  P 54 

Richards,  Ellis  G 51 

Sketch  of 52 

Richardson,  Joseph 37 

Riplev,  Edwin  G.,  Sketcli  of 28,31 

Riplev,  David 12 

Ripley,  G.  B 11 

Risteen,  A.  I) 117 

Roath,  William 61 

Roberts,  Enoch  C 113 

Robertson,  John  B .50,  72 

Robins,  Ephraim,  Sketch  of 33 

Robins,  W.  B 34 

Robinson,  David  F 33 

Robinson,  Vine .58,  59 

Root,  Elisha  K ....  112 

Root,  Ephraim (i 

Royce,  Philander  C 21 

Ruggles,  Samuel  B 36 

Russell,  Gnrdon  W 93 

Russell,  Talcott  II 80 

Russell,  Thomas  W S3,  102 

Sketch  of 103 

aAGE,  Ehenezer 8 

^^     Sanford,  Elihn 8 

Sauford,  Peleg 4 


INDEX. 


125 


Page 

Sanford,  Thomas 3 

Sanfonl  iV  \V;ulsw(ii-tli 2,  5,  S2 

Sattfi-lec,  I).  K 5.S 

Security  Insiirant't*  ("(nupanv  (New  Haven)  : 

Kscapes  tlie  great  tii-es  at  rliieagii  and  Boslfin, 
35;  changes  of  policy,  3o;  successive  otlieers, 
36;   its  prosperitv.  l-iti. 

Sexton,  .Inlins  M.       ". ' 52 

Seymour,  Daniel  K 104 

Seyniiiur, .lames  8 14 

Sevnionr,  John  S IIS 

Seymour,  .lohii   W 90,  93 

Seymour,    (Jrigeii    S 8H,  100 

Seyms,  George  II llti 

Sliepard,  Charles      59,  60 

Sherman,  Ko^er 8 

Shipnian,  Elias 2,  5,  8,  32 

Shipman.  .loliu 8 

Shullas,  .Tames  I? 60 

Sillimau,  lieujaniiii  69,  70,  71 

Simrall,  .1.  W'.  (i 35 

Skilton,  1>.  \V.  C,  Sketch  of 43 

Skinner,  Koger  S 15,  21,  23 

Smith,  A.  T;  .  104,  105 

Smith,  .Tosepli  A 60 

Smith,  .Joseph  L 75,  79 

Smith  A  Tatley 44 

Smith,  Thomas  M 85 

Soutli worth.  Wells 37 

Sprague.  .Joseph  H 52,  57 

Squire,  William  .1 85 

Stanton,  Lewis  E 88 

Starr,  .Tared 8 

State  Fire  Insurance  Company  (New  Haven): 

Mysterious  origin,  45  ;  adding  zero  to  zero, 
45  ;  unconscious  beneficiaries,  45  ;  entry  into 
Massachusetts,  45;  disappearance  of  the  sec- 
retary, 46  ;  Elizur  Wright,  commissioner,  de- 
ceived, 46 ;  talk  on  a  steamhoat,  46 ;  discov 
eries,  46;  anger  of  Mr.  Wright,  46;  call 
upon  the  State's  attorney  to  prosecute,  46; 
correspondence,  47  ;  Benjamin  Noyes  elected 
secretary,  47 ;  a  test  suit,  47 ;  penalty  for 
being  caught  in  bad  company,  47  ;  list  of 
as.sets,  47. 
State  Mutual  Insurance  Company  (Hartford).  61 

Stedman,  Edmund  A ' 85,89 

Stedman,  .John   W.,  73,  76,  79,  80,84,  86,  87,  88, 
101,  lis. 

Steel,  George  T 77 

Steere,  W.  T 12 

Stevens,  G.  Farnliam 56,  57 

Stevens,  Ha^sey 83,  85,  88 

Stillman,  Benjamin  R 51 

Sketch  of 52 

St.  .lolin,  Daniel 60 

St.  .John,  Howell  W 93 

Sketch  of 94 

Stock  notes      7 

Storr-,  Aaron  H 59 

Storrs,  Z.  A S3 

Sugden,  W'illiam  E 60 

Sumner,  George 64 

Swan,  Elder 62 

fyABER,  .tob S 

Taintor,  James  U.,  sketch  of 5() 

Taylor,  Charles 20 

Taylor,  James  P 104 


Pagr 

Taylor,  John  M 66 

Sketch  of 67 

Taylor.  Stephen 60 

Terrv,  Eliphalct      .    .        15,  16 

Sketch  of 17 

Terrv,  Nathaniel 12,1.3,15 

Skechof 16 

Thames  Fire  Insurance  Company: 

Formation,  mistortunes  and  retirement,  54  ; 
officers,  .54. 

Triomas.  Simeon 12 

Thorp,  P.  M 37 

Totten,  Gilbert 8 

Tomlinson,  Isaac 21 

Toucey,  Isaac 63, 109 

Towner,  Theron ;<6 

Tracy,  Henrv  B 11 

Tracy,  John  "C 100 

Travelers'  Insurance  Company: 

Inception  of  the  scheme,  106 ;  first  directors 
and  officers,  107  ;  lianl  work,  severe  economy 
and  close  study  of  new  problems,  107 ;  making 
paths  without  precedents,  107 ;  generalizing 
laws,  107;  diversified  dangers,  108;  birth  and 
death  of  new  accident  companies,  108  ;  loyalty 
of  employes,  108  ;  secession,  jokes  and  funeral, 
108;  addition  of  a  life  department,  109;  in- 
creases of  capital,  109;  purchase  for  home 
office  of  an  historic  mansion,  109;  character 
of  casualties,  109  ;  The  Travelers'  Record,  110; 
causes  of  success,  110;  James  Goodwin  Bat- 
terson,  110;  Rodnev  Dennis,  110;  (ieorge 
Ellis,  111  ;  John  E.  Morris,  111;  Edward  V. 
Preston,  111  ;  John  B.  Lewis,  111  ;  Sylvester 
C.  Dunham.  112;  statistics,  112. 

Trezevant  t*i  Cockran 56 

TurnbuU,  Thomas 21 

Twining,  A.  C 71 


T  TNION  Fire  Insurance  Comp;iny  (Hartford): 

Returns  capital  to  share  holders  and  retires,  .54. 
Union  Insurance  Company  of  New  London  .    .    . 


■y  A1,L,  Thomas  J 104 

T\rADSWORTH,  Daniel,  sketch  of 4 

**       Wadsworth,  .leremiah 2,4,32 

Sketch  of 4 

Wadsworth,  Tertius 94 

Wales,  (ieorge 15 

Wallace,  J.  A 54 

Walklev,  James  C 82,  83,  84,  85,  88 

Walker,  Henrv  D 78,  79,  80 

Waite,  C.  C.   ; 36 

War  of  1812  followed  by  commercial  distress    .    .       10 

Washburu,  J.  H 37 

Waterman,  Nathan  M 54 

Watkinsou,  David 12, 15 

Watkinson,  Edward  B 67 

Webster,  Charles  T.  .    .    .        .  55 

Webster,  J.  C,  sketch  of 93 

Weeks,  E.  O.,  sketch  of 31,118 

Welch,  Archibald 82 

Welch,  George  M 54 

Wells,  Daniel  H.,  sketch  of 69 

Weils,  James  H 12 

Welles,  Gideon 82 


126 


INDEX. 


Page 

Wheaton,  B 59 

Wliite,  Adams        59 

White,  Joel  W 10 

VVliite,  Samuel  H 83,  85,  88 

Whiting,  Charles  B ly,  21,51 

Sketch  of 55 

Whitiug,  Spencer 3 

Whitman,  H.  A.     ...        105 

Whitne.v,  Amos  W 112 

W'hittemore,  B.  B 54 

Whittlesey,  Chauncev 8 

Wiggin,  Edwin  R.    ". 85,  88 

Wilco.x,  Jedediah 56 

Willard,  Charles  E 88 

Willard,   William  D 60 

Williams,  Abram 40 

Williams,  Benjamin 8 

Williams,  Ephraim 89,  118 

Williams,  Ezekiel,  Jr 3,  7,  32 

Sketch  of 5 


Page 

Williams,  Joseph 11,  12 

Williams,  J.  F til 

Williams,  Thomas  S.;  Sketch  of 7 

Williams,  William 12 

Wilmarth,  A.  F 21,  28 

Wilson,  Charles 53 

Windham  County  Mutual  Insurance  Company  : 

Incorporation,  methods  and  assessments,    58  ; 

pay  of  officers  and  ilirectors,  58  ;  officers,  59. 

Wintei-s,  Charles  J GO 

Wolcott,  Oliver .    .     109 

Woodhridge,  Samuel     ...  12 

Woodhridge,  Ward 12 

Woodruff,  Samuel  ...  ...       54 

Woodward,  Truman 8 

Woodward,    William 60 

Wooster,  William    B 80 

Wright,  Elizur 46,  47,  70 

Wyman,  Williaru  H 32,  35 

Young  &  llodges .21 


^^^^^mmK<m 


^^ 


S— &>! 


■fe— 5 


^^M^jim^f- 


^^ 


J»— ! 


D     000  013  968 


